Dlf Universal Ltd. & Anr vs Director, T.&C.; Planning Haryana & Ors

5. In order to consider the question as to the validity of the impugned memo few relevant facts may have to be noticed. BACKGROUND FACTS :

6. The appellants were granted licence under the provisions of Haryana Development and Regulation of Urban Areas Act, 1975 (for short `the Act') and the Rules framed thereunder, i.e. Haryana Development and Regulation of Urban Area Rules, 1976 (for short `the Rules') for setting up residential colonies. The appellants entered into required agreements with the Governor of Haryana acting through Director Town 5 and Country Planning, Haryana. The appellants acting under the licence so granted and the agreements commenced setting up colonies by dividing the land into plots. The plots were sold to various buyers. The plot buyers are required to make construction on such plots to be used for the purpose for which the lay out was approved. The appellants have also allotted flats to various persons and have entered into agreements. Mutual rights and obligations between the appellants and the plot/flat buyers is structured by the agreements voluntarily entered into by them and all terms and conditions, covenants were mutually agreed by and between the parties. In respect of certain areas even completion certificates were granted as early as in the year 1991-92. The Director all of a sudden without any notice whatsoever to any of the appellants issued the impugned directions which were challenged on various grounds in the High Court.

(i) to enter into an agreement in the prescribed form for carrying out and completion of development works in accordance with the licence granted ;

3-A . Establishment of Fund (1) Any colonizer whom a licence has been given under this Act shall deposit as service charges a sum [at such rate as may be prescribed by the Government from time to time, per square metre of the gross area and of the covered area of all the floors in case of flats proposed to be developed by him into a colony] in two equal instalments. The first instalment shall be deposited within 60 days from the date of the 13 grant of the licence and the second instalment to be deposited within six months from the date of grant of the licence.

(6) The amount of service charges so deposited by the colonizer shall constitute a fund called the Haryana Urban Development Fund (hereinafter referred to as the Fund) which shall vest in the State Government.

Section 5. Cost of Development Works (1) The colonizer shall deposit thirty per centum of the amount realised, from time to time, by him, from the plot-holders within a period of ten days of its realisation in a separate account to be maintained in a scheduled bank. This amount shall only be utilised by him towards meeting the cost of internal development works in the colony. After the internal development works of the colony have been completed to the satisfaction of the Director, the coloniser shall be at liberty to withdraw the balance amount. The remaining seventy per centum of the said amount shall be deemed to have been retained by the coloniser, inter alia, to meet the cost of land and external development works.

(iv) to construct at his own cost, or get constructed by any other institution or individual at its cost, schools, hospitals, community centres and other community buildings on the lands set apart for this purpose, or to transfer to the Government at any time, if so desired by the Government, free of cost the land set apart for schools, hospitals, community centres and community buildings, in which case the Government shall be at liberty to transfer such land to any person or institutions including a local authority on such terms and conditions as it may deem fit ;

(e) undertake to construct at his own cost or get constructed by any other institution or individual at its cost, schools, hospitals, community centers and other community buildings on the land set apart for this purpose, or undertake to transfer to the government at any time, if so desired by the Government free of cost, the land set apart for schools, hospitals, community centers and community buildings, in which case the Government shall be at liberty to transfer such land to any person or institution including a local authority on such terms and conditions as it may deem fit; and

(2) The colonizer shall within a period of three months after the close of every financial year, submit to the director through registered post with acknowledgement due a statement of accounts indicating the amount 22 realized from each plot-holders, the expenditure incurred on internal and external development works separately of the colony with details thereof together with the amount due from each plot holder indicating their postal address. This statement should be duly audited, certified and signed by a chartered accountant.

12. Whether the Director is empowered to issue any direction, directing the appellants not to collect the extension fee with further direction to delete the relevant clauses from the agreement?

17. Section 5 of the Act merely requires the colonizer to deposit 30% of the amount realised, from time to time, from the plot holders in a separate account to be maintained in a scheduled bank and the said amount is to be utilised by him only for meeting the cost of internal development works in 29 the colony. After the completion of the internal development works to the satisfaction of the Director, the colonizer is entitled to withdraw the balance amount. The remaining 70% of the said amount shall be deemed to have been retained by the colonizer to meet the cost of the land and the external development works. There is no doubt that accounts are required to be maintained by the colonizer in the prescribed manner.

include replacement of bulbs, tubes etc., maintenance of electrical system and its upgradation. 37

c) Reparing and strengthening of boundary walls and fencing.

d) Conservancy and general upkeep, which shall include sweeping of roads, door to door garbage collection and its disposal, clearing of unwanted growth of plants in vacant plots, repair/replacement/painting of signages, guide maps and gates etc.

e) Upgradation of Roads/parks.

f) Establishment/administrative charges for rendering the aforesaid services, which shall include salaries of staff, rent of the building, telephone, printing, stationery, electricity, computer expenses etc. incurred in running complaint centre in DLF City.

28. Whether the amount of maintenance service charges was already included in the sale price of the plots/flats?

34. It further provides for the consequences that may flow after the cancellation of the licence.

35. From a fair analysis of these provisions, it becomes clear that the Director's functions and duties and as well as power is completely structured by the statute and the Rules. He undoubtedly plays a vital role and is authorised to issue appropriate directions from time to time concerning the execution of layout and development works in the colony and every such directions issued are required to be complied with by the licensee.

40. Thus while Act and Rules may impose many restrictions on profit percentages etc. time limit on construction and handing over of such construction, such power does not encompass within itself the right to exercise power in manner that inhibits terms and contracts and freedom granted therein.

LIMIT OF 15% PROFIT :

41. The question as to whether appellants made any profit over and above 15% would arise for consideration only after the grant of final completion certificate in respect of the entire colony/development. The application for grant of final completion certificate remained pending with the authorities since long time. The complete accounts are to be finalized to determine whether the 15% limit on the profit has been exceeded and whether the colonizers/owners made profits over and above that. Further steps may have to be taken in accordance with law only thereafter. It would be appropriate to direct the authorities to decide the application so filed by the developers/colonizers for grant of final completion certificate as expeditiously as possible preferably within six months. In case if it is found that the owners had exceeded the said 15% limit on the profit, it shall always be open to the authorities to take appropriate action in accordance with law. 50

42. For the aforesaid reasons, we find it difficult to sustain the impugned memo of the Director and the same is set aside. But this order of ours shall not preclude owners of plots/flats to avail such remedies as may be available to them in law and raise any dispute that had arisen or may arise and for the enforcement of contractual terms and conditions in which event the matters have to be decided on its own merits uninfluenced by the observation, if any, made in the order of the High Court of Punjab and Haryana and in this order. The question as to whether the cost of the plot includes the maintenance charges may have to be decided on a proper interpretation of the terms and conditions of the agreement. The court in a public law remedy cannot undertake the task of resolving disputes arising out of a contract for such disputes as they essentially lie in the private law domain.

43. In the circumstances, we find it very difficult to sustain the view taken by the High Court for upholding the impugned memo issued by the Director, Town and Country Planning. 51 The judgment of the High court is, accordingly, set aside. The appeals are, accordingly, allowed subject to the observations made hereinabove.

44. All interlocutory applications and contempt cases are, accordingly, disposed of in terms of this order.

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[SURINDER SINGH NIJJAR] New Delhi, November 19, 2010