Bawana Factories Welfare Association Regd & Anr v. Govt of NCT of Delhi & Ors

8. A copy of the governmell Circular dated 17tr' August 2010.otifui'$ the rate for the Industrial Estate - Bhorgarh at Bawana-Il has been enclosecl. It is poilted out that a Comrnittee was constituted comprising the Additional Commissionel of Industries (GNCTD) as Chairtnan, the Deputy commissioner of Industries (GNCTD), chief Mauager (Relocation), DsIIDC, Deputy Financial Advisor (works), DSIIDC anct Executive Engineer' (Bhorgarh), DSIIDC. The Cbmrnittee detelmined the cost based on the expenditure incurred and projected by the DSIIDC' The committee noted that the cost of the plots had increased 'ti'orn the initial estirnate of Rs. 5,1501- pel sq. m. to about Rs. 8,5201- pet sq' m' due to various factors such as itlprovement!of street ligfiting, inclusion of 60 rn' for better connectivity, construction of an underground rl t/ reservoir a1d effluents pumping station, increase i[1] the cost index. ilcrease i[1] the Delhi Jal Board charges and in increase in electrification costs etc. fhis Committee also took note of the problems of rnaintenance faced by industrial estates set up earlier and suggested the setting up of a corpus for a long-teln maintenance fund. Accordingly, it was suggestec! that Rs. 1,000/- per sq. m. should be charged fiom each allottee fo[1] creation of the fund so that it may generate a corpus of Rs' 75 crores' A copy of the minutes of the Committee has been enclosed with the affidavit.

9. It appears that the rationale for including a component towards crosssubsicly for EWS housing was based on the prevalent plactice of tire DDA. In paras 15 ancl 16 of the affidavit, it has been explained as under: "15. That the multiplier of 1.[5] applied for Bhorgarh is the same as that applied by the DDA for plots under 'Light Industt'y' category in the size range of 50 sq. rneter to 400 sq. rheter' The multiplier' of 1.[5] h.as been applied as per the directions ancl approval of the Governrnelt. The amount so generated is to be used towards tlontargeted cross subsidy for development of Ecolomically Weaker Sections (EwS) lrorrsing, JJ & squatters, settlement, etc. i[6]. That the DDA has beel applyilg the multiplier at least from lgg[2] onward. In thi's regard, the documents obtained fiom DDA toward costing of Dwarka Project in 1992 and Tikri I{alan Plastic Bazaa in 1999; and sotne notifications of Predetermined Land Rates issued by the Ministry of urban Development aud Poverty Alleviation, Gover'runent of India in 2009 and 2010 are enclosed as Annexures-C (Colly) respectively' v The perusal of DDA land costing methodolbgy (Annexule cl) wonld clearly reveal that in Dwarka Ploject in 1992, against the break-even rate of Rs. 1100.46 fer sq.mt., a higher rate of Rs. I375.54 has been charged for industrial land, whereas lower rate of Rs.550.22 per sq.mt. has been charged for EWS and JJ & Squatters settlement. Lower rates have also'been chalged fiom some other categori'es like LIG, charitable institutions, and utilities. sirnilariy, DDA Resolution of |ggg (Annexure C[2]) notifies the rate of industrial plots of 300 sq. meters and 495 sq' meters as Rs' ' 2305 per sq. rneter and lts. 2689 pel sq. meter against the Bleak Even Rate of Rs. 1536 per sq' meter; whereas much lower/nominal costs have been fixed for lands for police statiou, fire station, health services, utilities, etc' The Goverrunent of India, Ministry of.urban Development notifications {Amexufes C[3] (Co11y)} of pre-determiled rates for Plastic Bazaar, Tikri Kalan for year 2008-09 and 2009-10 also apply rnultiplier of 1.[5] for 'Light Industry' plots of 300 sq' meters in size. Fr.om the above it would be kindly seen that the policy of applying multiplier is reasonable and is in use for a long time'"

10. It is explainecl that the DSIIDC did not apply the above multiplier oi' 1.[5] for Bawana-I plols since it had a low market.price in the initial yeals o[ development. A number of eligible applicalts had opted oqt of those allotrr.ents and sought refund of the earnest money deposited' Flowever' the exper.ience as regards the Bhorgarh plots has been diffelent' It is pointed out that the rnarket rate for the sale disposal of the land and for continuously I' \\ increased as under: Rate of Industrial land at Bawana (RuPees Per square rneter) ' 6,720 8,400 10,080 27,400 30,140 33,I54 36,469" "Year, 2004-05 2005-06 2006-07 2007-08 2008-09 2009-r0 2010-1 1 I 1. It is further stated as under:.,It is peftinent to mention that the market rate for industrial lanclnotifieclbythegovernmentfor20l0-llforBawana Industrial Area is Rs. 36,4691- per square tneter' Therefore the rnarket rate for Bhorgalh may be taken as Rs. 36,4691- per sq' meter at par with the rate of nearby estates. compared to the rnarket tates, the allotment made by the respondent @ Rs'15,5661-persq.meterisstilltnuchontlrelowersideandis reasonable. Even the circle rate determined by the Govenrment of NC I of Delhi is approximately I\s'27 '4001-;' t[2]. ThePetitioners have, however, disputed the above figures' This courL has no means, in a petition under Article 226 of the constitution' to' determine the above disputed question of. fact' There is no basis for tl'e court to doubt the correctness of the details set out by the DSIIDC in its affidavit as regards prevalent market rate and circle lates for plots in,/ Zr Y)

13. On a consideration of the submissions of the learned counsel for the' parties, one of the first questions that this courl is called upoll to considet' is whether the r.ecovery of 50% of the gl'oss cost for light industries f'or cross-subsidy towards EWS housing, atnounting to Rs. 4259j0 per sq' 1r., in telrns of the policy of the GNCTD, is albitrary or urueasonable ip the context of Article 14 of.the Constitution? This Court finds that tire decision to charge Rs. 4259.10 as cross-subsidy towards categories such as EWS housing is based on a government policy' The allotment letters were issued to about 4615 units in Bhorgarh in 2005 and 2006' It was clearly indicated at that time that the cost per plot was Rs' 5,1501- per sci: m. but also that it was a tentative one. The precise clause in the allottnent letter in thiS regard read as under:, "The tentative cost of the plot is Rs. 5150/- per sqllare tneter' whichissubjecttochangedependingupontheactualcostof development of the industrial plot and directions issued by the Government of Delhi in this regard' 'l.: This is to inform yog that tire cost indicated above is te'tative' The allottee will be liable to pay any increase in the cost of the plot due to any reason(s) whatsoevet'"

14. There were two distinct caveats in the above clause. The first was that the cost was iiself tentative. It depended on the actual bost of development of the industrial plot. 'fhe second was that it also depended on the directions issued by the GNCTD. The addin g of 50% of the gross cost' of cross-subsidy IbI IIWS housing to the cost of the plots is relateable to the \b clirections issued by the GNCTD. In view of the above clause ur allotment letter, the Petitioners cannot claim to have been taken surlrrise on account of the inclease in the cost on the above Scole' " 15. In this connection, this Court would like to observe that there is a clear distinctiol between the facts in the case of P. N' Verma v' Union of Inditt and the present case. Para 4 of the judgment in P.N' Vermu sets out tire relevalt clause in those cases as regards cost of the SFS flats' The said clause reads as under:- "The estimated cost of flats on each floor would be announced wheneverspecifiedschemeshavebeenpreparedtakingirrto consideration the location of each scheine, specifications and design of flats, cost of construction prevailing at the time of the execution of the scheme, fluctuations in other cost factors'"

16. It is plain that in the above clause in P.N. Verntu, no caveat was entered that the cost would increase on account of the directions issued by govel.nmerrt florn time to tirne. Secorrdly, those. wefe SFS flats and no parallel can be drawn with a schetne like the present otle involving allotment of industrial plots. For the same reason, the judgment of the supreme cgurl in DDA v. Joint Actiott corttnrittee is also distinguishable'

17. The decision of the DSIIDC, not to recovel' from the allottees of plol's at Bawana-I or Narela, any element of cross-subsidy towards EWS housing, is really a rnatter of policy. The DSIIDC would have hacl to the by w accorult for several factors including the way in which the market behaved on the earlier occasion. The view of the DSIIDC that, given the response of the allottees of plots in Bawana-I, it would not be advisable to increase fr*ther the cost of the plots by adding any element of Ews cross-snbsidy, calnot be said to be gnreasonable or arbitrary. The situation now is obvio*sly different. The figrres set out in the counter-affidavit of the DSIIDC show that there has been a marked increase in the rnarket rates of plots in Bawana-Il. The rate which was Rs. 10,080/- per sq. m' in2006-07 increased to Rs. 27,400 per sq. m. in 2007-09. The s'brnission that the Respondents by not adding an element of EWS cross-subsidy to the cost of the plots at Narela, where the market price was deterrnined at Rs.24,000 l- per se. ffi., acted arbitrarily is again to no avail' it is really for the Respondents to decide whether or not t'hey would char ge the crosssubsidy element. from different set of allottees at h given point iir tirne' It is difficult to hold such dccision to be either arbitrary or discrimi'atory in tenns of Article 14. In rnatters of allotrnent of land at subsidised rates, tlte passage of tirne and the behaviour of the rnarket are relevant factors which cannot be ignored by the Respondents' 18.'It is urged that the Respondents should not be simpl)/ seen to be rnaking profit and were expected to operate on a no-profit-1o-loss basis' If one went by the figures given by the Respondents in their connter affidavit, then a plot of land for which the circ.le rate deterrnined by the GNCTD is Rs. 27,4001- per sq. ilr., antl for which the market rate is Rs'. ': 36,4601- per sq. m., is being aliotled al arate of Rs. 15,5661- pel sq' m' Surely, it cannot be said that the DSIIDC is profiteering fi'om the sale of plots at Bawana-Il (Bhorgarh). It can well be said'that the Petitioncrs are getting the plots at subsidised rates'

19. It was not practical to expect the Responclents to offer the aiterlative plots -to all'the 23,000 plot-holders ruuniug industrial truits in nouconforrning area as on 19tl'April 1996 at one go' Alternative land had to be located and then developed to make it suitable for industrial putposes' The relocation had to obviously be done in phases and over a period of tirne. It is inevitable in the process that the allotment of plots had to be sequential. This would inevitably result in the later allottnents being tlaElc at a cost highel than the eallier allotments' The malket value of the lan'J has gone up in the tneanwhile and that too dramatically' The latel allottees cannot be said to be prejudiced on this score' Moreover' adtnittedly the allottees have been exteuded the facility of availing of loans fiorn financial institutions for the entire cost of the plot' Z0.Inits order clated 27't' October' 201 0 in Motrcl' Juan v' DSIIDC' dris court had, while dismissing the writ petitions, observed as under: ''l,.2. This Court h'ds that the scope of interfel'ence by this Court in exer.cise of its powefs under Article 226 ofthe Constitution in matters involving fixation of price by the authorities for land is nafrow' In I{avitaAht|av.Delhi'Statelntlustrial&InJt,ostructure, Developrneri corltorutiort Ltd. (decision dated 16tr' Iiebruary 2010 in T \q \\ the challenge to the action of the DSIIDC in charging lts' 4,2001- per sq. m. for plots in Bawana Industrial atea, Rs. 5,4001- pet sq' rn. for plots in the Industrial estate at Narela, Jhilmil and Badli ald Rs' 7,560/- per sq. rn. for plots in Patparganj Industrial atea. A Sirigle Judge of this court had set asicle the demand for the increased cost on the ground that the DsIIDC failed to show that it had undeftalcen any developmenl activity or incuned any expenditure loss for the plots' This was reversed by the Division Bench of this Courl by a juclgm'qni dated 22"d February 2008. The Division Bench uphelcl the action c'rf tlre DSIIDC of charging F(s. 7,7761- pet sq. m. for the plots al Narela' This judgment was challenged in the Supreme court and the order cf the Division Bench of this court was upheld. In pala 13, it was observed by the Supretne Court as under:..13.ThepriceofRs.540ol-persqm.fixedin200Iisnot disputed by the allottees. I{aving regard to thb interest on the investment by way of financing cost, overheads and other factors, if the policy of the NCT of Delhi is to increase the price every year by zoyo, it cannot be statecl that the said increase is unreasonable or albitrary' I-Iavilg regard to the fact that the lands ale being continuously acquir.edanddevelopedandallotted,itwillbevct.y difficult to calculat" ih" actual costs. at any giving P!in[1] oftime.SolongastheCorporationhasshownthatithad adoptedareasonablemethodoffixationofallotment pricesandhasasserledtlratpricefixalion.isona.no proht no loss' basis, the price i: lol open for dealt with the issue appropriately ani has rightly upheld the plice of Fts- 77761- Per sq'm'"

3. 'this courl tinds that, in principle, the Supreme coutl declined tb interfbre with the enhauced cost demandecl by the DSIIDC in 1lre Narela cases on account of several factors'"

21. Thereafler, in pala 6 it was observed as under:,.6. There are no judicially manageable standards to enable this courl to cletermine whethel the charging of Rs' 15,5661- per sQ' ir): is arbitrary or unreasonable' Learned couusel for the Respondents informs this Courl that the cost revision was based on several factors and that the figure was arrived at after an elaborate exercise, recorcls for which are available with the Itespondents. Be that as it may, given the judgment of the Suprerne Courl in Ifuvita Ahuja, it is not possible for this Court to interfet'e in the rnatter of enhancement of the costs for the industrial plotg at Bhorgah in Bawana Industrial Area."

22. Asregards the charging of interest by the DSIIDC fi'om the allottees at 18% per annum on the delayed payments, while paying thern interest at 10% per annuln on the amounts deposited by them, this Court finds that this again is dictated by the way the money market behaves. It is not peculiar to the present cases. This appears to be. the standard'practice of financial institutions and banks.

23. As regards the creation of'the corpus.fund for maintenance, this Court fi1ds the explanation offered in the countet-affidavit based on tbe reconmendations of the Cornrnittee to be reasonable aud plausible. It is not possible for this Court to sit'in appeal over such determination and to hold it to be ubrtrary or uffeasonable. Neverlheless, it has been clarifieci by Ms. Salwan, the learned counsel appearing for DSIIDC that with the Petitioners being mad.e to pay Rs. 1,000/- per sq. tn. towards creation of the corpus fund for maintenance, the sun of 2.5Yo of land vaiue towartis annual maintenance woul<l not be'charged. It was fuither clarified fliat if, at aldter poilt in time, the.mailtenance fund was fottnd to be inadequate, for the putpose, a further lump sum might be charged fi'om each of the' R\ allottees. 2a. in the above c.ircumstatlces, this Courl is unable to be pelsuaded io I i I holdjthat the charging of Rs. 1 5,5661- per sq. m. for the plots at Bawana-Il I (Bhorgalh) by the DSIIDC is albitrary or unreasonable.

25. The writ petitions are disrnissed but in the cilcurnstances with orders as to costs. Applications also stand dismissed DECEMBER 14,20L0 akg

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