# 15 (ADDL.) S.C.R. 85 DLF UNIVERSAL LTD. AND ANR v. DIRECTOR, T & C. PLANNING HARYANA AND ORS

- **Citation:** [2010] 15 S.C.R. 85
- **Court:** Supreme Court of India
- **Decided:** 2010-11-19
- **Case number:** Civil Appeal No. 550 of 2003
- **Bench:** B. Sudershan Reddy, Surinder Singh Nijjar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/15-addl-s-c-r-85-dlf-universal-ltd-and-anr-v-director-t-c-planning-haryana-and-26760
- **Pages:** 46

## Headnote

Haryana Development and Regulation of Urban Areas
Act, 1975:
Scheme of the Act - Held: The Act intends to regulate
the use of land in order to prevent ill planned and haphazard
urbanization in or around towns in the State of Haryana -
Urban development.
ss.2(i), 5; r.118 r.w. r.26(2) of Haryana Development and
Regulation of Urban Areas Rules, 1976 - Extension fee and
maintenance fee - Power of Director (Town and Country
Planning) to prohibit the colonizer/owner of the land to collect
A
B
c
D
the extension fee and the maintenance fee from plot/flat
E
holders -
Held: There is nothing in the Act, Rules and
Regulations prohibiting the colonizer/owner of the land to
collect additional amount on account of non-completion of the
construction by the purchaser within the period stipulated in
the agreement - The licence granted by the Director do not
F
prohibit incorporation of such a clause in the agreement to
be entered between the owners and the purchasers - The Act
also does not suggest that the owner is required to provide
the maintenance services free of cost - The Director has no
authority under the Act to issue directions to the owners/ G
colonizers to incur maintenance expenses, by deeming the
same to be part of the internal development works covered
by s.2(i).
85
H
86
SUPREME COURT REPORTS [2010) 15 (ADDL.) S.C.R.
A
Transfer fee - Allottee's right to nominate another person
as purchaser of property whether can be denied by colonizer
- Held: There is no provision whatsoever in the Stamp Act or
Registration Act imposing any restriction on the assignment
or transfer of rights under a sale/purchase agreement by the
8 purchaser to a third party, before the execution of any
conveyance deed in respect of any immovable property- The
conveyance deed executed by the owner is the one which is
executed either in favour of the allottee or his nominee as the
case may be on which a proper stamp duty and registration
fee is required to be paid - Director (Town and Country
C Planning) has no power under the Act or the Rules to issue
direction prohibiting such nomination of another person
thereby substituting the al/ottee.
Jurisdiction of the Director (Town and Country Planning)
D to meddle with the terms of agreements entered into by and
between the owner and the purchasers of flat/plots - Held:
E
There is no provision in the Act or the Rules empowering the
Director to sit in judgment on the perceived fairness of any
clauses incorporated in the agreement entered by the parties.
Sale price of plots/flats - Determination of - Held: The
sale price charged by the owner from the buyers for the sale
of the plots/flats is a market driven sale price and is not based
on any particular figure of cost - The provisions of the Act or
F the Rules in no manner impose any price control directly or
indirectly in respect of plots/flats sold by the colonizer/owner
- The question as to whether the cost of the plot includes the
maintenance charges has to be decided on a proper
interpretation of the terms and conditions of the agreement.
G
Functions and duties of Director of Town and Country
H
Planning -
Held: The Director plays vital role and is
authorized to issue appropriate directions from time to time
concerning the execution of layout and development works
in the colony and every such direction issued is required to
DLF UNIVERSAL LTD. v. DIRECTOR, T & C.
87
PLANNING HARYANA
be complied with by the licencee - He is is not authorized to
A
interfere with agreements voluntarily entered into by and
between the owner/colonizer and the purchasers of plots/flats
-
The agreed terms and conditions by and between the
parties do not require the approval or ratification by the
Director;, nor is the Director authorized to issue any direction s
to amend, modify or alter any of the clauses in the agreement
entered into by and between the parties.
Profit - Limit of 15% profit - The question as to whether
the owner made any profit over and above 15% would arise ·
for consider

## Text

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[2010] 15 (ADDL.) S.C.R. 85
DLF UNIVERSAL LTD. AND ANR.
v.
DIRECTOR, T & C. PLANNING HARYANA AND ORS.
(Civil Appeal No. 550 of 2003)
NOVEMBER 19, 2010
[B. SUDERSHAN REDDY AND SURINDER SINGH
NIJJAR, JJ.]
Haryana Development and Regulation of Urban Areas
Act, 1975:
Scheme of the Act - Held: The Act intends to regulate
the use of land in order to prevent ill planned and haphazard
urbanization in or around towns in the State of Haryana -
Urban development.
ss.2(i), 5; r.118 r.w. r.26(2) of Haryana Development and
Regulation of Urban Areas Rules, 1976 - Extension fee and
maintenance fee - Power of Director (Town and Country
Planning) to prohibit the colonizer/owner of the land to collect
A
B
c
D
the extension fee and the maintenance fee from plot/flat
E
holders -
Held: There is nothing in the Act, Rules and
Regulations prohibiting the colonizer/owner of the land to
collect additional amount on account of non-completion of the
construction by the purchaser within the period stipulated in
the agreement - The licence granted by the Director do not
F
prohibit incorporation of such a clause in the agreement to
be entered between the owners and the purchasers - The Act
also does not suggest that the owner is required to provide
the maintenance services free of cost - The Director has no
authority under the Act to issue directions to the owners/ G
colonizers to incur maintenance expenses, by deeming the
same to be part of the internal development works covered
by s.2(i).
85
H
86
SUPREME COURT REPORTS [2010) 15 (ADDL.) S.C.R.
A
Transfer fee - Allottee's right to nominate another person
as purchaser of property whether can be denied by colonizer
- Held: There is no provision whatsoever in the Stamp Act or
Registration Act imposing any restriction on the assignment
or transfer of rights under a sale/purchase agreement by the
8 purchaser to a third party, before the execution of any
conveyance deed in respect of any immovable property- The
conveyance deed executed by the owner is the one which is
executed either in favour of the allottee or his nominee as the
case may be on which a proper stamp duty and registration
fee is required to be paid - Director (Town and Country
C Planning) has no power under the Act or the Rules to issue
direction prohibiting such nomination of another person
thereby substituting the al/ottee.
Jurisdiction of the Director (Town and Country Planning)
D to meddle with the terms of agreements entered into by and
between the owner and the purchasers of flat/plots - Held:
E
There is no provision in the Act or the Rules empowering the
Director to sit in judgment on the perceived fairness of any
clauses incorporated in the agreement entered by the parties.
Sale price of plots/flats - Determination of - Held: The
sale price charged by the owner from the buyers for the sale
of the plots/flats is a market driven sale price and is not based
on any particular figure of cost - The provisions of the Act or
F the Rules in no manner impose any price control directly or
indirectly in respect of plots/flats sold by the colonizer/owner
- The question as to whether the cost of the plot includes the
maintenance charges has to be decided on a proper
interpretation of the terms and conditions of the agreement.
G
Functions and duties of Director of Town and Country
H
Planning -
Held: The Director plays vital role and is
authorized to issue appropriate directions from time to time
concerning the execution of layout and development works
in the colony and every such direction issued is required to
DLF UNIVERSAL LTD. v. DIRECTOR, T & C.
87
PLANNING HARYANA
be complied with by the licencee - He is is not authorized to
A
interfere with agreements voluntarily entered into by and
between the owner/colonizer and the purchasers of plots/flats
-
The agreed terms and conditions by and between the
parties do not require the approval or ratification by the
Director;, nor is the Director authorized to issue any direction s
to amend, modify or alter any of the clauses in the agreement
entered into by and between the parties.
Profit - Limit of 15% profit - The question as to whether
the owner made any profit over and above 15% would arise ·
for consideration only after the grant of final completion C
certificate in respect of the entire colony/development - In
case, it is found that the owners had exceeded the said 15%
limit on the profit, it is always open to the authorities to take
appropriate action in accordance with law.
Deeds and documents: Contract - Interpretation of -
Held: A contract is to be interpreted according to its purpose
D
- Every contract expresses the autonomy of the contractual
parties' private will - The court is required to determine the
ultimate purpose of a contract primarily by the joint intent of E
the parties at the time the contract so formed - It is not the
intent of a single party; it is the joint intent of both parties which
is to be discovered from the entirety of the contract and the
circumstances surrounding its formation -
Purposive
construction.
F
Contract: Public law remedy - Held: 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.
The appellants were granted licence under the
provisions of Haryana Development and Regulation of
Urban Areas Act, 1975 and the rules framed thereunder
for setting up the residential colonies. They entered into
G
the required agreements with the Governor of Haryana H
88
SUPREME COURT REPORTS (2010] 15 (ADDL.) S.C.R.
A through the respondent-authority and commenced
setting up colonies by dividing the lands into plots. The
plots were sold to various buyers. The plot buyers were
required to make construction on such plots to be used
for the purpose for which the layout was approved. The
8
appellants also allotted flats to various persons and
entered into the agreements on the conditions and
covenants mutually agreed between them. In respect of
certain areas even completion certificate was granted as
early as in the year 1991-92.
c
The respondent, without any notice to the appellants,
issued the impugned memo whereby he directed the
appellants to delete the provision in the agreements
which were entered into between the appellants and the
plot/flat owners relating to the extension fee and
D maintenance fee; and stop the charging of the extension
fee and the maintenance fee from the plot/flat holders and
refund the amount so recovered to the Government
immediately; to stop allowing the transfer of plots after
obtaining full payment for the same and to ensure
E immediate registration of conveyance deed on receipt of
full payments of the plot/flats. Aggrieved, the appellants
filed the writ petitions before the High Court. The High
Court upheld the validity of impugned memo and
dismissed the writ petitions. The instant appeals were
F · filed challenging the order of the High Court.
G
H
Allowing the appeals with certain observations, the
Court
HELD:
1. Scheme of the Act : The Haryana Development and
Regulation of Urban Areas Act, 1975 intends to regulate
the use of land in order to prevent ill planned and
haphazard urbanization in or around towns in the State
DLF UNIVERSAL LTD. v. DIRECTOR, T & C.
89
PLANNING HARYANA
of Haryana. The Act applies to all urban areas in the State
A
of Haryana. [Para 8] [101-A-B]
2.1. Interpretation of Contract: It is a settled principle
B
in law that a contract is interpreted according to its
purpose. The purpose of a contract is the interests,
objectives, values, policy that the contract is designed to
actualize. It comprises joint intent of the parties. Every
such contract expresses the autonomy of the contractual
parties' private will. It creates reasonable, legally protected
expectations between the parties and reliance on its
C
results. Consistent with the character of purposive
interpretation, the court is required to determine the
ultimate purpose of a contract primarily by the joint intent
of the parties at the time the contract is so formed. It is
not the intent of a single party; it is the joint intent of both
parties which is to be discovered from the entirety of the
contract and the circumstances surrounding its
formation. In a contract between the joint intent of the
parties and the intent of the reasonable person, joint
ir.tent trumps, and the Judge should interpret the contract
accordingly. A party who claims otherwise, violates the
principle of good faith. [Para 11] [115-G-H; 116-A-F]
D
E
Anson's Law of Contract, "a basic principle of the
Common Law of Contract; Purposive Interpretation in Law by
Aharon Barak 2005 Princeton University Press - referred
F
to.
2.2. The validity of impugned memo is required to be
decided with reference to the scheme of the Act, Rules
and the Regulations framed thereunder. The agreement
with the Governor required to be entered by owners of
G
land intending to set up a colony is structured and
regulated by Rule 11 of the Haryana Development and
Regulation of Urban Areas Rules, 1976. The agreement
by and between the owners/colonizers, agreed terms and
conditions and covenant therein are purely under private
H
90
SUPREME COURT REPORTS [2010) 15 (ADDL.) S.C.R.
A
law domain. The terms and conditions of the agreement
and the obligations of the owner of land and covenants
thereof are prescribed by Statutory Rules. The contract
between the owner of land and its buyers, unlike the
agreement entered by the owner of the land with the
8
government, is not required to be in any statutory form.
It is a contract between the two willing contracting
parties whereunder the terms and conditions are
mutually agreed upon. The covenants decide the mutual
obligations between the owner of the land and the
C buyers thereof. [Paras 9, 10, 31] [115-D-G; 125-F-G]
3.1. Extension Fee: The agreement entered into by
the owners and purchasers inter-alia provided that the
purchaser shall, after approval of his building plans from
the competent authority, "be bound to commence
D construction of the house on the plot not later than three
years from the date the sale deed is executed in his
favour" and in case the purchaser fails to commence
construction within the stipulated period, the seller shall
be entitled to resume the plot, refund the amount paid
E
by the purchaser and to resell the plot to somebody else.
However, the seller in its sole discretion may extend the
said period of construction "provided the purchaser
pays additional charges to the owner." It was mutually
agreed that a provision to this effect may have to be
F
incorporated in the sale deed and the purchaser "shall
be bound by the same." This clause enabled the owner
to charge additional amount for the non-completion of
the construction by the purchaser within the period
stipulated in the agreement. There is nothing in the Act,
G the Rules and Regulations prohibiting the owner of the
land to collect such charges from the buyer. The said
provision for payment of "extension fee" has been
provided for in the agreement, according to the
appellants, only in the interest of speedy development
H of each colony, and also in order to prevent purchase
DLF UNIVERSAL LTD. v. DIRECTOR, T & C.
91
PLANNINC3 HARYANA
of plots by speculators who may keep the plot vacant
A
without making any construction with the only object to
earn profit by selling the same at a future date and such
an act may prove detrimental to other purchasers as
such acts obstruct the all round development of the area
which is pre-eminently/ predominantly in the public
B
interest. [Para 13] [116-H; 117-A-F]
3.2. The Act does not confer any authority or
jurisdiction upon the Director to meddle with the terms
of agreement entered into by and between the owners
and the purchasers of the plots/flats. The Director's
C
functions and duties are well structured by the Act and
the Rules. There is no provision in the Act or the Rules
empowering the Director to sit in judgment on the
perceived fairness of any clauses incorporated in the
agreement entered by the parties. The terms and
D
conditions in the licence granted by the Director do not
prohibit incorporation of such a clause in the agreement
to be entered between the owners and the purchasers.
Nor there is any clause in the agreement entered by the
owner with the Governor through the Director
E
empowering the Director to sit in appeal over the
agreement entered by the owners with the purchasers
of the plots. There is no explanation forthcoming as to
the source of power under which the Director could have
issued the impugned directions directing the owner to
F
delete such clauses from the agreement entered with the
purchasers. [Paras 14, 15] [117-G-H; 118-A]
3.3. Section 5 of the Act and Rule 11 B r.w. Rule 26
do not in any manner restrain or prohibit the colonizer/ G
owner to insist buyers of the plots to complete
construction in time bound manner and charge extra
amounts as may be agreed between the parties for
failure to do so. These provisions do not empower the
Director to issue the impugned directions prohibiting the
H
92
SUPREME COURT REPORTS [2010) 15 (ADDL.) S.C.R.
A owners to collect the extension fee for the delayed
construction of buildings by the purchasers of the plots.
The dispute, if any, between the parties to the agreement,
may have to be resolved in a properly constituted
proceeding in private law domain. [Para 17] [119-B-F]
B
4. Transfer Fee: The prevailing practice of permitting
transfer of plots before registration of conveyance deed
to the allottee is not contrary to the provisions of the Act
or the Rules. Section 17(1)(b) of the Registration Act
requires that where the Conveyance Deed has been
C prepared for effecting the transfer of a plot or other
immovable property, such deed should be registered
within a period of 4 months after its execution. It does not,
however, contain any provision whatsoever requiring that
a Conveyance Deed should be executed within any
D period of time after the execution of sale agreement
between the buyer and the seller. There is no provision
whatsoever in the Stamp Act or Registration Act imposing
any restriction on the assignment or transfer of rights
under a sale/purchase agreement by the purchaser to a
E third party, before the execution of any conveyance deed
in respect of any immovable property. The parties in the
agreement had agreed for the substitution of the name
of allottees at the sole discretion of the owner. The
conveyance deed executed by the owner is the one
F
which is executed either in favour of the allottee or his
. nominee as the case may be on which a proper stamp
duty and registration fee is required to be paid. In any
event the Director has no power under the Act or the
Rules to issue any such direction altogether prohibiting
G such nomination of another person thereby substituting
the allottee. [Para 19] [120-A-F]
H
5.1. Maintenance Fee: The Act, no doubt, imposes
certain obligations upon the colonizers/owners and
DLF UNIVERSAL LTD. v. DIRECTOR, T & C.
93
PLANNING HARYANA
specifies certain items of expenses to be borne by them.
A
Section 3(3)(a)(ii) of the Act requires the colonizer/owner
to pay proportionate development charges if the external
development works as defined under Section 2(g) of the
Act are to be carried out by the Government or any other
local authority. Similarly Section 3(3)(a)(iv) requires the
.. owner to construct at his own cost the schools, hospitals,
community centres and other community buildings on
the lands set apart for the said purposes. Further, Section
B
5 of the Act read with Rule 11 (1 )(b) imposes obligation
and requires the owner to meet the cost of internal c
development works as defined in Section 2(i) of the Act.
It is no doubt true that Section 3(3)(a)(iii) imposes
responsibility for the maintenance and upkeep of all
roads, open spaces, public parks and public health
services for a period of five years from the date of issue
D
of the completion certificate unless earlier relieved of this
responsibility and thereupon to transfer all such roads,
open spaces, public parks and public health services free
of cost to the Government or the authority, as the case
may be. A bare reading of the provisions does not
E
suggest that the owner is required to provide the said
maintenance services free of cost. On the other hand, the
latter part of Section 3(3)(a)(iii) provides that on the expiry
of the said period of five years the owner is required to
transfer all such roads, open spaces etc. free of cost to
the government or the local authority, as the case may
be. [Paras 21- 22] [121-C-H]
F
5.2. There is no dispute whatsoever that any
maintenance fee or charges are being collected by the
owners/colonizers in respect of any of the internal
G ,
development works mentioned in Section 2 (i). The
appellants are rendering the following additional services,
which are not in any manner whatsoever covered by
Section 3(3)(a)(iii) or any provisions of the Act or the
H
94
SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A Rules. a) Round the clock security b) Electricity
consumption of street lights, which shall include
replacement of bulbs, tubes etc., maintenance of electrical
system and its upgradation. c) Repairing and
strengthening of boundary walls and fencing. d)
B 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/
c 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. The maintenance
0 fee/charges levied and collected are clearly not in respect
of any of the internal development works defined under
clause (i) to (v) of Section 2 (i). Clause (i) to (v) of Section
2 (i) refers to "Works" which are erected within the colony
as an integral part of the internal development of the
colony. The residuary clause (vi) of Section 2 (i) also
E refers to "work" which means and implies activities akin
to that of which constitute an 'internal development of
the colony'. Providing services of the kind for which the
maintenance charges/fee are collected, are in no manner
in respect of a "work" of "internal development" which
F is required to be carried out within the licenced area. The
expression "work" in Section (i) (vi) cannot be interpreted
in isolation ignoring the clauses (i) to (v) in Section 2 (i).
Such a construction is impermissible in law. It is,
therefore, clear that the Director has no authority or
G power under the Act to issue any directions directing the
owners/colonizers to incur maintenance expenses, by
deeming the same to be part of the internal development
works covered by Section 2(i). The maintenance of
services specifies in Section 3(3)(a)(iii) cannot be
H
DLF UNIVERSAL LTD. v. DIRECTOR, T & C.
95
PLANNING HARYANA
considered to be part of the internal development works
A
as defined by Section 2 (i). Though this plea has not been
taken by the Director in the High Court nor any such point
is urged on his behalf in these appeals, the material
available on record suggested that the Director has never
considered the maintenance expenses to be part of
B
internal development works as specified in Section 2 (i).
Section 3(3)(a) of the Act mandates the colonizer/,owner
to furnish a bank guarantee equal to 25% of the
estimated cost of the development works. It is an admitted
case that the Director has not taken into consideration c
the said maintenance expenses for the purpose of
computing the amount of the bank guarantee, which is
25% of the total cost of the internal development works.
[Paras 24-27] [122-F-H; 123-H; 124-A-E]
6.1. There is no price fixation formula devised under
D
the provisions of the Act, Rules and Regulations framed
thereunder. The Statutory Authorities have no role to play
in the fixation of price and costs of land and rate at which
the plots/flats are to be sold. The price charged by the
owner for the plot is fixed and covered by clauses (1) and
E
(2) of plot sale agreement entered into by and between
the parties. The agreed sale price of the plot includes
external development charges. The payment of
maintenance charges by the plot buyer is provided for in
clause (14) of the said agreement. The Act, Rules and the
F
Regulations framed thereunder do not provide for any
approval or ratification of the agreements so entered into
by and between the owners/colonizers. The Director of
the Country and Town Planning is not required to put his
seal of approval on the agreements so entered. The
G
Director is not authorized or empowered to review or
evaluate the terms of contract and resolve the disputes,
if any, between the owners/colonizers and the
purchasers of plots/flats. [Paras 29] [124-G-H; 125-A-C]
H
96
SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A
6.2. The sale price charged by the owner from the
buyers for the sale of the plots/flats is a market driven
sale price and is not based on any particular figure of
cost. The provisions of the Act or the Rules in no manner
impose any price control directly or indirectly in respect
B of plots/flats sold by the colonizer/owner. The sale and
purchase of the plots/flats is between a willing vendor and
a willing vendee. The Director is not empowered to
meddle with the transactions and put any restriction on
the rights of the owner/colonizer in the matter of sale and
c purchase of plots/flats. [Para 30] [125-D-E]
7. The Director 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
D be complied with by the licensee. The Director is not
authorized to interfere with agreements voluntarily
entered into by and between the owner/colonizer and the
purchasers of plots/flats. The agreed terms and
conditions by and between the parties do not require the
E approval or ratification by the Director nor is the Director
authorized to issue any direction to amend, modify or alter
any of the clauses in the agreement entered into by and
between the parties. It is thus clear that there is no
provision in the Act, Rules or in the licence that
F empowers the Director to fix the sale price of the plots
or the cost of flats. The impugned directions issued by
the Director are beyond the limits provided by the
empowering Act. The directions so issued by the Director
suffer from lack of power. Any order which is ultra vires
G or outside jurisdiction is void in law, i.e. deprived of its
legal effect. An order which is not within the powers given
by the ernpowering Act, it has no legal leg to stand on.
Order which is ultra vires is a nullity, utterly without
existence or effect in law. Thus while Act and Rules may
H impose many restrictions on profit percentages etc. time
DLF UNIVERSAL LTD. v. DIRECTOR, T & C.
97
PLANNING HARYANA
limit on construction and handing over of such
A
construction, such power does not encompass within
itself the right to exercise power in manner that inhibits
terms and contracts and freedom granted therein. [Paras
35, 36, 37, 40] [127-C-H; 128-H; 129-A]
Khargram Panchayat Samiti and another v. State of W 8.
and others (1987) 3 SCC 82; D.L.F. Qutab Enclave Complex
Educational Charitable Trust vs. State of Haryana and others
(2003) 5 sec 622 - relied on.
B
c
8. Limit of 15% Profit: 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
D
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
E
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. For the said
reasons, the impugned memo of the Director is not
sustainable and the same is set aside. But this order shall
F
not preclude owners of plots/flats to avail such remedies
G
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
H
98
SUPREME COURT REPORTS (2010] 15 (ADDL.) S.C.R.
A of the High Court 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
B undertake the task of resolving disputes arising out of a
contract for such disputes as they essentially lie in the
private law domain. [Paras 41, 42] [129-8-H]
Case Law Reference:
c
(1987) 3 sec 02
relied on
Para 38
(2003) s sec s22
relied on
Para 39
D
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 550
of 2003.
From the Judgment & Order dated 31.5.2001 of the High
Court of Punjab & Haryana at Chandigarh in W.P. No. 6704 of
E 1999.
WITH
C.A.Nos. 551, 1611 of 2003.
F Contmt. Pet. (C) Nos. 215 of 2005 in C.A. No. 550 of 2003.
Contmt. Pet. (C) Nos. 106 of 2006 in C.A. No. 550 of 2003.
S. Ganesh, Harish Malhotra, Uday U. Lalit, Pravin
G Bahadur, Kanika Gomber, Rajeshwari Shukla, Mallika Joshi,
Rajan Narain, Rohina, Nath, Priyadeep, Umesh Kumar Khaitan,
Chanchal Kumar Ganguli, M.K. Michael, Sudarsh Menon,
Jitender Choudhary, Shila Chohan, Rajesh Singh, Kamal Mohan
Gupta, C.S. Ashri, Sanjeev Anand, Manoj Swarup, Vinay Kumar
Garg, Madhu Tewatia, Sidhi Arora for the appearing parties.
H
DLF UNIVERSAL LTD. v. DIRECTOR, T & C.
99
PLANNING HARYANA
A
The Judgment of the Court was delivered by
B.SUDERSHAN REDDY, J. 1. These appeals are
directed against the orders of Punjab and Haryana High Court
dismissing the Writ Petitions filed by the appellants herein
challenging the impugned order dated 05.05.1999 passed by
8
the Director, Town and Country Planning, Chandigarh, Haryana.
The High Court upheld the validity of the impugned memo and
accordingly dismissed the Writ Petitions. The same is
challenged in these appeals on various grounds.
2. We have heard the learned senior counsel Shri Harish
C
Salve, Shri S. Ganesh, Shri Harish Malhotra and the learned
counsel Shri Rajiv Vermani for the appellants and Shri U.U.
Lalit, learned senior counsel for the respondEmts. We have also
heard the learned counsel appearing on behalf of the
interveners-applicants.
D
3. The central question that arises for our consideration in
this group of appeals is whether the Director, Town and Country
Planning, is empowered to pass the impugned order? Whether
the impugned order is ultra vires?
4. By the impugned memo the Director had purported to
give the following directions:
E
(a)
the provision in the agreement between the
appellant and the plot/flat buyers regarding
F
extension fee and maintenance fee should be
deleted from the agreement as the same is not
permissible under the law;
(b)
further directed to stop charging of extension fee
G
and maintenance fee from the plot/flat holders
henceforth and the charges recovered on account
of both from the plot/flat holders "may be refunded
to the Government immediately."
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100 SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A
(c)
stop allowing the transfer of plots after obtaining full
payment for the same and to ensure immediate
registration of Conveyance Deed "where the full
payments of the ploUflats have been received."
8
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
c 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
D the Governor of Haryana acting through Director Town 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
E 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 ploUflat
buyers is structured by the agreements voluntarily entered into
by them and all terms and conditions, covenants were mutually
F 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
G Court.
H
7. In order to consider the central question as to whether
the impugned order is void and unenforceable, it is just and
necessary to notice the relevant provisions of the Act.
DLF UNIVERSAL LTD. v. DIRECTOR, T & C.
101
PLANNING HARYANA [B. SUDERSHAN REDDY, J.]
SCHEME OF THE ACT :
A
8. The Act intends to regulate the use oi land in order to
prevent ill planned and haphazard urbanization in or around
towns in the State of Haryana. The Act applies to all urban areas
in the State of Haryana. We shall notice the relevant provisions 8
of the Act and the Rules which are as under :
" Section 2. Definitions
(a) .......... , ................. ..
(aa) ............................ .
c
(b) ............................. .
(c) "colony" means an area of land divided or proposed
to be divided into plots or flats for residential, commercial, D
industrial, cyber city or cyber park purposes or for the
construction of flats in the form of group housing or for the
construction of integrated commercial complexes, but an
area of land divided or proposed to be divided-
(i)
for the purpose of agriculture ; or
E
(ii)
(iii)
(iv)
as a result of family partition, inheritance,
succession or partition of joint holding not with the
motive of earning profit ; or
F
in furtherance of any scheme sanction under any
other law; or
by the owner of a factory for setting up of a housing
colony for the labourers or the employees working
in the factory; provided there is no profit motive ; G
or
{v)
when it does not exceed one thousand square
metres or such less area as may be decided from
time to time in an urban area to be notified by H
102
SUPREME COURT REPORTS (201 OJ 15 (ADDL.) S.C.R.
A
Government for the purposes of this sub-clause.
shall not be a colony ,
B
c
D
E
F
G
H
(d)
"colonizer" means an individual, company or
assoi::iation or body of individuals, whether
incorporated or not, owning land for converting it
into a colony and to whom a licence has been
granted under this Act ;
(dd) "cyber city" means self contained intelligent city with
high quality of infrastructure, attractive surrounding
and high speed communication access to be
developed for nucleating the Information Technology
concept germination of medium and large software
companies and Information Technology enabled
services, wherein no manufaturing units shall be
permitted ;
(ddd) "cyber park" means an area developed exclusively
for locating software development activities and
Information Technology Enabled Services, wherein
no manufacturing of any kind (including assembling
activities) shall be permitted ;
(e)
"development works" means internal and external
development works ;
(f)
(g)
"external development works" include water supply,
sewerage, drains, necessary provisions of
treatment and disposal of sewage, sullage and
storm water, roads, electrical works, solid waste
management and disposal, slaughter houses,
colleges, hospitals, stadium/sports complex, fire
stations, grid sub-stations etc. and any other work
which the Director may specify to be executed in
the periphery of or outside colony/area for the
benefit of the colony/area;
DLF UNIVERSAL LTD. v. DIRECTOR, T & C.
103
PLANNING HARYANA [B. SUDERSHAN REDDY, J.]
(gg) "flat" means a part of any property, intended to be
A
used for residential purposes, including one or .
more rooms with enclosed spaces located on one
(h)
0)
(k)
(I)
or more floors, with direct exit to a public r.treet or
road or to a common area leading to such streets
or road and includes any garage or room whether
B
or not adjacent to the building in which such flat is
located provided by the coloniser/owner of such
property for use by the owner of such flat for parking
any vehicle or for residence of any person employed
in such flat, as the case may be ;
c
(i) "internal development works" mean-
(i) metalling of roads and paving of footpaths;
D
(ii) turfing and plantation with trees of open spaces;
(iii) street lighting ;
(iv) adequate and wholesome water-supply ;
E
(v) sewers and drains both for storm and sullage
water and necessary provision for their treatment
and disposal ; and
(vi) any other work that the Director may think
F
necessary in the interest of proper development of
a colony;
"owner" includes a person in whose favour a lease
G
of land in an urban area for a period of not less than
ninety nine years has been granted ;
H
104 SUPREME COURT REPORTS (2010] 15 (ADDL.) S.C.R.
A
(m)
"plot/flat holder" means a person in whose favour a
B
c
D
E
F
G
H
(n)
(o)
plot/flat i11 a colony has been transferred or agreed
to be transferred by the coloniser ;
Section 3 Application for licence :
(1)
(2)
Any owner desiring to convert his land into a colony
shall, unless exempted under section 9, make an
application to the Director, for the grant of a licence
to develop a colony in the prescribed from and pay
for it such fee and conversion charges as may be
prescribed. The application shall be accompanied
by an income-tax clearance certificate :
Provided that if the conversion charges have
already been paid under the provisions of the
Punjab Scheduled Roads and Controlled Areas
Restriction of Unregulated Development Act, 1963
(41 of 1963), no such charges shall be payable
under this section.]
On receipt of the application under sub-section (1),
the Director shall, among other things, enquire into
the following matters, namely :-
(a} title to the land ;
(b) extent and situation of the land ;
(c) capacity to develop a colony ;
(d) the layout of a colony ;
(e) plan regarding the development works to be
executed in a colony ; and
DLF UNIVERSAL LTD. v. DIRECTOR, T & C.
105
PLANNING HARYANA [B. SUDERSHAN REDDY, J.]
(f) conformity of the development schemes of the
A
colony land to those of the neighbouring areas
(3)
After the enquiry under sub-section (2), the Director,
by an order in writing, shall-
(a)
grant a licence in the prescribed form, after the
B
applicant has furnished to the Director a bank
guarantee equal to twenty-five per centum of the
estimated cost of development works in case of
area of land divided or proposed to be divided into
plots or flats for residential, commercial or industrial c
purposes and a bank guarantee equal to thirtyseven and a half per centum of the estimated cost
of development works in case of cyber city or cyber
park purposes as certified by the Director and has
undertakenD
(i)
to enter into an agreement in the prescribed form
for carrying out and completion of development
works in accordance with the licence granted ;
(ii)
to pay proportionate development charges in the
E
external development works as defined in clause(g)
of section 2 are to be carried out by the
government or any other local authority. The
proportion in which and the time within which, such
payment is to be made shall be determined by the
F
Director ;
(iii)
the responsibility for the maintenance and upkeep
of all roads, open spaces, public parks and public
health services for a period of five years from the
date of issue of the completion certificate unless
G
earlier relieved of this responsibility and thereupon
to transfer all such roads, open spaces, public
parks and public health services free of cost to the
Government or the local authority, as the case may
be;
H
106
SUPREME COURT REPORTS [2010] 15 (ADDL.) S.C.R.
A
(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
B
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
c
terms and conditions as it may deem fit ;
{v)
to permit the Director or any other officer authorized
by him to inspect the execution of the layout and the
development works in the colony and to carry out
D
all directions issued by him for ensuring due
compliance of the execution of the layout and
development works in accordance with the licence
granted :
(4)
The licence so granted shall be for a period of 2
E
years and will be renewable from time to time for a
period of one year, on payment of prescribed fee.
Provided that the Director, having regard to the
amenities which exist or are proposed to be
F
provided in the locality, is of the opinion that it is
not necessary or possible to provide one or more
such amenities, may exempt the licencee from
providing such amenities either wholly or in part ;
(b)
refuse to grant a licence, by means of a speaking
G
order, after affording the applicant an opportunity of
being heard.
[Provided that in the licensed colony permitted as
a special project by the Government, the licence
H
DLF UNIVERSAL LTD. v. DIRECTOR, T & C.
107
PLANNING HARYANA [B. SUDERSHAN REDDY, J.]
shall be valid for a maximum period of five years
A
and shall be renewable for a period as decided by
the Government.]
(5)
A separate licence shall be required for each
colony.
B
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 c
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
D
the grant of the licence and the second instalment
to be deposited within six months from the date of
grant of the licence.
(2)
The Haryana Urban Development Authority local
1 -'''
authorities, firms, undertakings of Government and
E
other authorities involved in land development shall
also be liable to deposit the ,service charges and
shall be deemed to be colonizers for this purpose
only.