LEGAL ISSUE: Whether mere registration for a housing scheme guarantees allotment of a plot or house.
CASE TYPE: Consumer Law
Case Name: UP Housing and Development Board vs. Ramesh Chandra Agarwal
Judgment Date: May 01, 2019
Date of the Judgment: May 01, 2019
Citation: 2019 INSC 445
Judges: Dr Dhananjaya Y Chandrachud, J and Hemant Gupta, J
Can a housing board be compelled to allot a flat to a person who merely registered for a housing scheme, but did not follow the procedure for participating in the draw of lots? The Supreme Court of India addressed this question in a recent case involving the UP Housing and Development Board. The court clarified that mere registration does not guarantee allotment and that specific steps must be taken by the applicant to participate in the allotment process. The judgment was delivered by a two-judge bench comprising Dr. Dhananjaya Y Chandrachud, J and Hemant Gupta, J.
Case Background
In 1982, the Uttar Pradesh Housing and Development Board (appellant) introduced a housing scheme for Economically Weaker Sections. The respondent, Ramesh Chandra Agarwal, registered for the scheme by depositing ₹500. In 1985, he paid an additional ₹500 when the registration fee was increased to ₹1000. The registration booklet stated that registration did not guarantee allotment or any compensation if allotment was not made. The rules of the scheme, the UP Awas Evam Vikas Parishad-Registration and Allotment of Plots and Houses Rules, 1979, also specified that the Board was not obligated to allot houses to every registered person and that those not allotted were not entitled to claim dues.
The Board published its first advertisement in 1992, requiring registered applicants to submit written consent to be included in the draw of lots. The respondent did not provide this consent. He filed a consumer complaint in 1993, nearly eleven years after registration. In 1995, the Board published a second advertisement. The District Consumer Disputes Redressal Forum directed that the respondent could secure an allotment at the current value fixed by the Board. The respondent appealed this order. The State Consumer Disputes Redressal Commission (SCDRC) dismissed the appeal in 2015 due to the respondent’s absence during multiple hearings. The respondent then filed a revision before the National Consumer Disputes Redressal Commission (NCDRC) in 2016.
Timeline:
| Date | Event |
|---|---|
| 1982 | Respondent registers for the housing scheme by depositing ₹500. |
| 1985 | Respondent deposits an additional ₹500 when the registration fee was enhanced to ₹1000. |
| 1992 | First advertisement published by the appellant, requiring written consent for draw of lots. |
| August 30, 1993 | Respondent files a consumer complaint. |
| January 15, 1995 | Second advertisement published by the appellant. |
| April 5, 1995 | District Consumer Disputes Redressal Forum directs that the respondent could secure an allotment at the current value. |
| September 25, 1995 | Appellant published an allotment notice indicating the proposed allotment of vacant properties. |
| August 28, 1996 | Appellant enhanced the registration amount and all existing registered applicants were required to pay the difference in order to keep their registration alive for future schemes. |
| October 27, 1998 – April 28, 2015 | Appeal filed by the respondent was listed before the SCDRC at Lucknow on eight dates of hearing. |
| November 1, 2002 | Appellant issued an office order providing that those applicants who failed to get an allotment in the draw of lots could be entitled to refund of the registration monies. |
| April 28, 2015 | SCDRC dismissed the appeal due to the respondent’s absence. |
| August 18, 2016 | Respondent files a revision before the NCDRC. |
| July 26, 2018 | NCDRC directs the appellant to explore the availability of plots/flats. |
| August 8, 2018 | Appellant files an affidavit indicating the current prices for allotment. |
| December 11, 2018 | NCDRC directs allotment of a flat to the respondent for ₹2,50,000. |
| May 01, 2019 | Supreme Court sets aside the NCDRC order. |
Course of Proceedings
The District Consumer Disputes Redressal Forum initially ruled that the respondent could secure an allotment at the current market value. The respondent appealed to the State Consumer Disputes Redressal Commission (SCDRC), but the appeal was dismissed due to the respondent’s repeated absence during hearings. The respondent then filed a revision before the National Consumer Disputes Redressal Commission (NCDRC). The NCDRC directed the appellant to allot a flat to the respondent in the Mandola Vihar Yojana, Ghaziabad, for ₹2,50,000, which was challenged in the Supreme Court.
Legal Framework
The case is governed by the UP Awas Evam Vikas Parishad-Registration and Allotment of Plots and Houses Rules, 1979 (Rules of 1979), and the terms of the Registration Booklet. Rule 15 of the Rules of 1979 states:
“Board is not bound to allot the houses/plots to every registration holder. Those who are not allotted the land/house by the Board are not entitled to claim the dues/amount spent.”
Rule 30 of the Rules of 1979 outlines the procedure for allotment:
“Sending Application Form, Written Consent is necessary:
(1)In the event of availability of property in any Scheme, intimation to effect shall be published in newspapers through advertisement or written intimation shall be sent to the registered persons through registered post or both means of communication. Apart from description of available proper, date of allotment draw, place and time shall also be mentioned in the said written intimation.
(2)Application form in prescribed format shall be available at the place mentioned in the aforesaid intimation as well as in the office of Estate Management officer of the city. Merely getting his/her name registered with the parishad, the name of a registered person shall not automatically be included in the lottery draw. It would be compulsory for the registered person to submit written consent letter (in prescribed format) for each and every scheme before the date of lottery draw so that his/her name could be included in the draw.
(3) Application form can also be sent through registered post so as to reach in the concerned office before the last date. The Parishad shall not responsible for postal delay.
(4) The willing buyer must ensure that he is providing true and correct information in the application form. In complete and conditional form shall not be entertained. At any point of time, if it is found that the applicant has concealed any vital/relevant fact or has provided incorrect information, his application form shall be subject to rejection and if a plot or house has already been allotted to him/her, the Housing Commissioner shall have the power to cancel his allotment and to make deduction and to impose fine as provided in Rule 45.
(5)Priority will be given to the willing buyers, whose registration was done in first phase over those who were registered in the second phase. Similarly, persons registered in the second phase shall get priority over the buyers registered in the third phase, etc.
Provided that the Parishad shall reserve the right to invite application for allotment from registered persons of only one phase or more than one phases of any scheme. The Parishad further reserves the right to grant liberty to a particular class to participate in the registration phase. The particular class, so granted liberty, shall take benefit of priority in the registration phase, e.g. willing buyers of reserved class, who were registered in the first phase shall get priority over those reserved class buyers who were registered in the second phase.”
Clause 5 of the Registration Booklet stated:
“ The registration of a person does not in any way confer any right or guarantee that the Board is bound to allot a plot or house to him, nor will he be entitled to claim any compensation if he is not allotted the property as desired by him.”
Arguments
Appellant’s Arguments:
- The appellant argued that the respondent only registered for the scheme and was not allotted a flat.
- The appellant emphasized that Rules 15 and 30 of the Rules of 1979 clearly state that mere registration does not guarantee allotment.
- The appellant contended that registered applicants must provide written consent to participate in the draw of lots. The respondent failed to do so.
- The appellant highlighted that the respondent filed a consumer complaint eleven years after registration and was consistently absent before the SCDRC.
- The appellant stated that the NCDRC’s order compelling them to allot a flat for ₹2,50,000 was contrary to law, as there was no contract between the appellant and the respondent.
Respondent’s Arguments:
- The respondent claimed that he had made inquiries with the appellant about the likelihood of allotment since 1982.
- The respondent stated that he was never informed of any scheme or allotment in his favor.
- The respondent argued that the NCDRC’s order was just and equitable, as he had waited since 1982 for an allotment and should not be compelled to pay the current market value.
Submissions Table
| Main Submission | Sub-Submissions (Appellant) | Sub-Submissions (Respondent) |
|---|---|---|
| Entitlement to Allotment |
|
|
| Procedural Compliance |
|
|
| Legality of NCDRC Order |
|
|
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues in a separate section. However, the core issue addressed was:
- Whether mere registration for a housing scheme entitles an applicant to an allotment of a flat, especially when the applicant has not followed the procedure for participating in the draw of lots.
Treatment of the Issue by the Court
The following table demonstrates as to how the Court decided the issues:
| Issue | Court’s Decision | Brief Reasons |
|---|---|---|
| Whether mere registration entitles an applicant to an allotment | No | The Court held that mere registration does not confer a right to allotment. The rules of the scheme and the registration booklet clearly stated that the applicant must provide written consent to participate in the draw of lots. |
Authorities
The Supreme Court considered the following authorities:
- UP Awas Evam Vikas Parishad-Registration and Allotment of Plots and Houses Rules, 1979: The court relied on Rule 15, which states that the Board is not bound to allot houses to every registered holder, and Rule 30, which outlines the procedure for allotment, including the requirement for written consent to participate in the draw of lots.
- Clause 5 of the Registration Booklet: The court referred to this clause, which explicitly states that registration does not guarantee allotment.
Authorities Table
| Authority | How it was used by the Court |
|---|---|
| UP Awas Evam Vikas Parishad-Registration and Allotment of Plots and Houses Rules, 1979 | The Court relied on Rule 15 and Rule 30 of the Rules to determine that mere registration does not guarantee allotment and that written consent is necessary for participation in the draw of lots. |
| Clause 5 of the Registration Booklet | The Court referred to this clause to emphasize that registration does not confer a right to allotment. |
Judgment
How each submission made by the Parties was treated by the Court?
| Party | Submission | Court’s Treatment |
|---|---|---|
| Appellant | Mere registration does not guarantee allotment; written consent is required. | Accepted. The Court agreed that mere registration does not create an entitlement to allotment and that the respondent did not follow the required procedure. |
| Appellant | The NCDRC’s order to allot a flat for ₹2,50,000 was contrary to law. | Accepted. The Court found no legal basis for the NCDRC’s direction. |
| Respondent | He had made inquiries and was never informed of any scheme or allotment. | Rejected. The Court noted that the respondent did not follow the procedure for participating in the draw of lots, and mere inquiries did not create a right to allotment. |
| Respondent | The NCDRC’s order was just and equitable. | Rejected. The Court found the NCDRC’s order to be without legal basis and contrary to the principles of contract law. |
How each authority was viewed by the Court?
- The Court relied on Rule 15 of the UP Awas Evam Vikas Parishad-Registration and Allotment of Plots and Houses Rules, 1979 to emphasize that the Board is not bound to allot houses to every registered holder.
- The Court relied on Rule 30 of the UP Awas Evam Vikas Parishad-Registration and Allotment of Plots and Houses Rules, 1979 to highlight the requirement of written consent for participation in the draw of lots.
- The Court relied on Clause 5 of the Registration Booklet to reiterate that registration does not guarantee allotment.
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the clear terms and conditions outlined in the Registration Booklet and the Rules of 1979. The Court emphasized that mere registration does not create a vested right to allotment. The respondent’s failure to provide written consent to participate in the draw of lots was a critical factor in the Court’s reasoning. The Court also noted that the respondent did not pursue any remedies for a long time, filing a consumer complaint only after eleven years. The Court found the NCDRC’s order to be arbitrary and without any legal basis. The Court also highlighted the fact that the NCDRC’s order was contrary to the basic principles of contract law. The Court noted that the appellant, as a public authority, could not be compelled to enter into a contract with the respondent, especially when there was no contractual entitlement to an allotment at a specified price.
| Sentiment | Percentage |
|---|---|
| Rules of the Scheme | 30% |
| Absence of Written Consent | 25% |
| No Contractual Entitlement | 20% |
| Delay in Pursuing Remedies | 15% |
| Arbitrary NCDRC Order | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
Logical Reasoning
Registration for Housing Scheme
Did the applicant provide written consent to participate in the draw of lots?
NO
Mere registration does not guarantee allotment.
The housing board cannot be compelled to allot a flat.
Judgment
The Supreme Court allowed the appeal, setting aside the NCDRC’s order. The Court held that mere registration does not guarantee an allotment. The Court emphasized that the respondent had not followed the procedure for participating in the draw of lots and that the NCDRC’s direction to allot a flat for ₹2,50,000 was without any legal basis. The Court stated that there was no contractual entitlement for the respondent to receive an allotment at a specified price.
The Court quoted:
“In view of the clear position in the brochure and the Rules of 1979, the respondent had no vested right to seek an allotment.”
“There was no contractual entitlement of the respondent to the allotment of a flat much less for an allotment at a specified price.”
“In its effort to render justice, the NCDRC has adopted a view which is contrary to the basic principles of contract governing the law on the subject.”
Key Takeaways
- Mere registration for a housing scheme does not guarantee allotment.
- Applicants must follow the prescribed procedure, including providing written consent for participating in the draw of lots.
- Housing boards cannot be compelled to allot a flat to an applicant who has not followed the required procedure.
- Consumer forums cannot issue arbitrary directions for allotment at a specified price without any legal basis.
Directions
The Supreme Court did not provide any specific directions, other than setting aside the order of the NCDRC.
Development of Law
The ratio decidendi of this case is that mere registration for a housing scheme does not create a vested right to allotment. The judgment reinforces the importance of following the prescribed procedures for participating in the draw of lots. This clarifies that housing boards cannot be compelled to allot houses to applicants who have not complied with the requirements.
Conclusion
The Supreme Court’s judgment in UP Housing and Development Board vs. Ramesh Chandra Agarwal clarifies that mere registration for a housing scheme does not guarantee allotment. Applicants must actively participate in the allotment process by providing written consent for the draw of lots. The Court set aside the NCDRC’s order, emphasizing that housing boards cannot be compelled to allot flats to applicants who have not followed the prescribed procedures.
Category
Parent Category: Consumer Law
Child Category: Housing Allotment
Child Category: UP Awas Evam Vikas Parishad-Registration and Allotment of Plots and Houses Rules, 1979
FAQ
Q: Does registering for a housing scheme guarantee that I will get a house or flat?
A: No, mere registration does not guarantee allotment. You must also follow the specific procedures laid out by the housing board, such as providing written consent to participate in the draw of lots.
Q: What happens if I register for a housing scheme but don’t get an allotment?
A: If you do not get an allotment, you are generally not entitled to claim any compensation or a guaranteed allotment, unless the rules of the scheme specify otherwise.
Q: Can a consumer court force a housing board to allot a house to me if I have registered?
A: No, consumer courts cannot force a housing board to allot a house if you have not followed the required procedures for allotment. The court cannot create a contractual obligation where none exists.
Q: What should I do after registering for a housing scheme to ensure I am considered for allotment?
A: After registering, you should carefully read all the rules and guidelines of the scheme. Look for any requirements such as submitting a written consent to participate in the draw of lots. Make sure you follow all the steps to be eligible for allotment.