Chairman & M.D., Tamil
Nadu Housing Board. & ANR Vs. S. Raghavan & Ors.  INSC 1482 (2
JURISDICTION CIVIL APPEAL NO.1805 OF 2007 Chairman & Managing Director ...
Appellant (s) Tamil Nadu Housing Board & Anr. S. Raghavan & Ors. ...
Respondent (s) WITH Civil Appeal Nos.1807, 2180, 2181, 2182, 2183, 2184, 2185,
2186, 2187, 2188, 2189, 2190, 2191, and 2192 of 2007, 2193/2007, 2194/2007.
appeals by the Tamil Nadu Housing Board (`Board' for short) by special leave
are directed against the common order dated 16.10.2006 made by the Madras High
Court, allowing in part the writ petitions filed by the respondents (allottees
of flats/houses). The said writ petitions were filed challenging the
determination of the final cost of the land, capitalization charges and
interest in regard to Ellisnagar Housing Board Scheme and the consequential
demands made by the appellant Board in the years 2001 and 2002. The said
demands were based on the final land cost determined by the 2 Board as
Rs.6,32,630/- per ground as also the capitalization amount charged, as per GO
(MS) No.63 dated 2.2.2001. The allottees had also sought a direction to the
Board to execute deeds of conveyance in their favour, on receipt of the amounts
a detailed consideration of the long-standing disputes between the Board and
the allottees, in the light of calculations furnished by the Board, and
decisions taken by the Board during the pendency of earlier legal proceedings
on the suggestions of Lok Adalat, the High Court disposed of the writ petitions
with following directions :
(a) The allottees
(petitioners in the writ petitions) will pay the final land cost at the rate of
Rs.349100/- per ground with 5% nominal profit. The actual amount determined by
the appellant in respect of each allottee shall be paid together with interest
as per the rate set out in the agreement from 21.5.2004 till date of payment.
capitalization charges will be determined for the period from the date when
flat or house was made ready for occupation till date of allotment for
occupation and such amount will be indicated separately. The interest on such
amount will be payable from 21.5.2004.
(c) If the Housing
Board has not intimated the allottees about the capitalization charges so far,
it is open to the Housing Board to specify the amount as stated in clause (b)
and demand the same with interest from 21.5.2004.
On complying with the
above directions and satisfying any other requirement as per law, the allottees
who have prayed for execution of sale deeds in their favour are entitled to get
the sale deeds executed.
Appellant Board had contended before the High Court that the interest on the
difference in land cost should be from the date of allotment.
On the other hand,
the allottees had contended that liability to pay interest would arise only
from 21.5.2004 when the final cost was determined. The High Court accepted the
contention of the allottees and directed that interest should be claimed only
from 21.5.2004 -- the date of determination of the final cost. The appellant is
aggrieved by the restriction of liability of allottees in regard to interest
from 21.5.2004 instead of the respective dates of allotment.
Board also stated that it had borrowed funds from financial institutions for
construction; that in regard to the allotments made after the cut off date,
(the date up to which interest is charged while fixing/approving the selling
price under the scheme), the Board had capitalized the interest on the cost of
construction only till the cut off date; and that the Board was therefore
entitled to further capitalization amount from the cut off date to the date of
allotment or `ready for occupation date', whichever was later.
But the High Court
however directed that the capitalization amount should be charged only for the
period from the date when the flat/house was made `ready for occupation' till
the `date of allotment'. The Board contends that 4 the capitalization amount
claimed in accordance with its standard practice ought to have been accepted by
the High Court.
the matter was heard for some time on 27.8.2008 and the issues were
crystalised, both counsel took time to ascertain whether the long drawn
multi-round litigations could be put an end by modifying the direction of the
High Court in regard to interest on the difference in land cost, by altering
the date of commencement of interest as 1.1.2001 instead of 21.5.2004, having
regard to the fact that interest upto 31.12.2000 had been taken into account
while calculating the land cost as on 31.12.2000 as Rs.349100/- per ground.
the matter came up today, both counsel submitted that the parties were
agreeable for modification of the date of commencement of interest as 1.1.2001
instead of 21.5.2004 with reference to the final land cost of Rs.349100/- (with
5% profit) per ground as on 31.12.2000.
regard to capitalization, it was submitted on behalf of the Board that the
standard procedure adopted for arriving at the price for all schemes of the
Board, where the allotment was made after the cut off date was to add 5
capitalization charges on the cost of construction (that is, approved selling
price less land cost, profit and collection charge) from the `cut off date' to
date of allotment or ready for occupation date whichever was later. It was
submitted that in Ellisnagar Scheme, all allotments were made after the cut off
date, but the aforesaid procedure of adding capitalization charges was not
followed in arriving at the selling price; and that therefore, later on, based
on the GO dated 2.2.2001, the capitalization amount and interest thereon from
allotment date was intimated to the allottees. It was contended that the
standard method of capitalization adopted by the Board ought not to have been
disturbed by the High Court and that the decision will affect the right of the
appellant-Board to capitalize the interest component on the cost of
construction, under other schemes.
have carefully considered the contention regarding capitalization.
We find that on the
peculiar facts of these cases, the High Court has directed that the
capitalization should be done only from the date when the flat/house was made
ready for occupation till date of allotment, instead of from the cut off date.
On the facts and circumstances of the Ellisnagar scheme, it may not be
necessary to modify the direction relating to the manner of calculation of
capitalization charges. As the capitalization directed by the High Court is 6
with reference to the special facts of the scheme and its implementation, the
various orders of High Court passed from time to time in various litigations,
and the Lok Adalat negotiations and broad understandings, the said direction
regarding the manner of calculating capitalization charges, will not be a
precedent for any other scheme where the Board has adopted or proposes to adopt
the standard method of capitalization. The interest payable by the allottees on
the capitalization amount shall however be with effect from the date of GOM
No.63, dated 2.2.2001 and not 21.5.2004.
accordingly dispose of these appeals by making the following modifications to
the operative part of common order dated 16.10.2006 of the High Court :
(i) In Para 25(a),
the date `1.1.2001' should be substituted for `21.5.2004'.
(ii) In Para 25(b)
and (c), the date `2.2.2001' shall be substituted for `21.5.2004'.
(iii) To substitute
the following in place of last sub-para of Para 25 :
The Board shall
intimate the respondents-allottees, the amount due by them as per the order of
the High Court as modified above, within three months from today. The
respondents - allottees shall pay the amount so demanded within three months of
the date of demand. On payment of the amounts due by the allottee, the Board
shall execute the deed of conveyance in favour of the allottee. No costs.
[R. V. Raveendran]