Supreme Court Dismisses HUDA’s Appeal for Additional Plot Price: Jagdeep Singh Case (2023)

Date of the Judgment: May 8, 2023

Citation: 2023 INSC 503

Judges: Abhay S. Oka, J., Rajesh Bindal, J.

Can a government development authority demand additional payment for a plot of land from an allottee, simply because the cost of the land increased for the authority, even though the land wasn’t acquired through the Land Acquisition Act? The Supreme Court of India recently addressed this question in a case involving the Haryana Urban Development Authority (HUDA) and an allottee, Jagdeep Singh. The court had to decide whether HUDA could demand an additional price for a plot of land when the increase wasn’t due to an award under the Land Acquisition Act, but due to a revised transfer price from another government department. The judgment was delivered by a two-judge bench comprising Justice Abhay S. Oka and Justice Rajesh Bindal, with the opinion authored by Justice Rajesh Bindal.

Case Background

In 1986, Jagdeep Singh was allotted a plot in Sector-14, Hisar, by the Haryana Urban Development Authority (HUDA) at a rate of ₹224.90 per square yard. In 1993, HUDA issued a notice to Jagdeep Singh demanding an additional price for the plot and also threatened to resume the plot due to non-construction within two years of allotment. HUDA stated that the land was initially transferred to them by the Animal Husbandry Department at ₹1,21,000 per acre, but the rate was later revised to ₹3,00,000 per acre. Due to this increase, HUDA demanded an additional ₹76.80 per sq. yard from Jagdeep Singh, raising the total cost to ₹301.70 per sq. yard. Jagdeep Singh challenged this demand in a civil suit in 2003.

Timeline

Course of Proceedings

The Trial Court ruled in favor of Jagdeep Singh, stating that the additional price could only be demanded if there was an increase in land cost awarded under the Land Acquisition Act. The First Appellate Court and the High Court upheld this decision, leading HUDA to appeal to the Supreme Court. The lower courts emphasized that the land was transferred, not acquired, and thus the condition for additional price did not apply.

Legal Framework

The core of the dispute lies in Clause 9 of the allotment letter, which states:

“The above price is tentative to the extend that any enhancement in the cost of land awarded by the competent authority under the Land Acquisition Act shall also be payable proportionately as determined by the authority the additional price determined shall paid within 30 days of its demand.”

This clause was interpreted by the courts to mean that an additional price could only be demanded if the cost of land was increased by an award under the Land Acquisition Act. The Supreme Court also considered the judgment in Sanjay Gera vs. Haryana Urban Development Authority & Anr. [(2005) 3 SCC 207], which dealt with a similar issue and clause.

Arguments

Arguments by HUDA (Appellants):

• HUDA argued that the land was initially transferred to them by the Animal Husbandry Department at ₹1,21,000 per acre, but the rate was later revised to ₹3,00,000 per acre.
• They contended that since the cost of land to HUDA increased, the same had to be borne by the allottees as HUDA is a non-profit organization.
• HUDA stated that the additional price was calculated at ₹76.80 per sq. yard, bringing the total cost to ₹301.70 per sq. yard.
• They argued that the allottees should bear the increased cost of the land, as the initial price was tentative.

Arguments by Jagdeep Singh (Respondent):

• Jagdeep Singh argued that the allotment letter specified that additional price could only be demanded if there was an increase in the cost of land awarded by a competent authority under the Land Acquisition Act.
• He contended that since the land was not acquired but transferred by the Animal Husbandry Department, the condition for demanding additional price was not met.
• He asserted that the price was determined at the time of transfer and any subsequent price revision cannot be imposed on the allottees.

Submissions of the Parties

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section, but the core issue was:

1. Whether HUDA could demand an additional price for the plot based on the increased cost of land when the land was not acquired under the Land Acquisition Act, but transferred from the Animal Husbandry Department.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

Cases Relied Upon:

• Dynandeo Sabaji Naik & Ors. vs. Pradnya Prakash Khadekar & Ors. [(2017) 5 SCC 496] – Supreme Court of India: Cited to emphasize that frivolous litigations should be discouraged and dealt with firmly.
• ICOMM Tele Ltd. Vs. Punjab State Water Supply and Sewerage Board and Ors. [(2019) 4 SCC 401] – Supreme Court of India: Cited to reiterate the disapproval of frivolous litigation.
• Sanjay Gera vs. Haryana Urban Development Authority & Anr. [(2005) 3 SCC 207] – Supreme Court of India: This case, involving a similar issue and clause, was relied upon to quash the demand for additional price. The court noted that the condition for enhancement was specific to awards under the Land Acquisition Act.

Legal Provisions Considered:

• Clause 9 of the allotment letter: The clause was interpreted to mean that additional price could only be demanded if the cost of land was increased by an award under the Land Acquisition Act.

Authorities Considered by the Court

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

The Supreme Court heavily relied on its previous judgment in Sanjay Gera vs. Haryana Urban Development Authority & Anr. [(2005) 3 SCC 207]* , which dealt with a similar issue and clause. The Court followed the interpretation in *Sanjay Gera* and held that the additional price could not be demanded as there was no enhancement of cost under the Land Acquisition Act. The Court also cited Dynandeo Sabaji Naik & Ors. vs. Pradnya Prakash Khadekar & Ors. [(2017) 5 SCC 496]* and ICOMM Tele Ltd. Vs. Punjab State Water Supply and Sewerage Board and Ors. [(2019) 4 SCC 401]* to emphasize that frivolous litigations should be discouraged and dealt with firmly.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the specific wording of Clause 9 in the allotment letter, which explicitly linked the demand for additional price to enhancements under the Land Acquisition Act. The Court emphasized that the land was transferred, not acquired, and therefore, the condition for demanding additional price was not met. The Court also expressed strong disapproval of HUDA for filing a frivolous appeal despite a previous Supreme Court judgment on the same issue. The Court was also influenced by the fact that the respondent had been dragged into unnecessary litigation for a small amount.

Logical Reasoning:

The Court considered the plain language of the allotment letter, which specified that additional price could only be demanded if there was an enhancement in the cost of land awarded by the competent authority under the Land Acquisition Act. Since the land was not acquired but transferred, the court found that the condition for demanding additional price was not met. The Court also relied on the precedent set in the case of Sanjay Gera vs. Haryana Urban Development Authority & Anr. [(2005) 3 SCC 207]. The Court also noted that the litigation was frivolous and time-wasting.

The Supreme Court did not find any merit in the arguments raised by the Appellants. The court observed that the issue was already settled by the Supreme Court in the case of Sanjay Gera vs. Haryana Urban Development Authority & Anr. [(2005) 3 SCC 207]. The court also noted that the Appellants were aware of the judgment but still contested the suit and filed an appeal. The court observed that the Appellants were wasting the time of the court and were burdening the judicial system.

The Court quoted from Dynandeo Sabaji Naik & Ors. vs. Pradnya Prakash Khadekar & Ors. [(2017) 5 SCC 496], stating: “Courts across the legal system-this Court not being an exception – are choked with litigation. Frivolous and groundless filings constitute a serious menace to the administration of justice. They consume time and clog the infrastructure.”

The Court also observed that the officers of HUDA were shirking their responsibility by not taking decisions and putting everything to court. The Court noted that the additional amount sought to be recovered from the Respondent was ₹26,880/- to which there was no justification even at the stage of issuance of notice. The Court held that the amount spent on litigation would be much more than the amount sought to be recovered.

Key Takeaways

• Development authorities cannot demand additional price for land based on increased costs if the land was not acquired under the Land Acquisition Act and the allotment letter specifies that additional price is linked to awards under the Land Acquisition Act.
• Frivolous litigation is strongly discouraged, and courts may impose heavy costs on parties that engage in such practices.
• Government authorities should take responsibility for their decisions and not burden the courts with unnecessary appeals.
• The judgment reinforces the principle that contractual terms, especially in allotment letters, must be strictly adhered to.

Directions

The Supreme Court directed HUDA to pay a cost of ₹1,00,000 to the Supreme Court Mediation Centre and ₹50,000 to the respondent, Jagdeep Singh. The Court also directed that the cost be recovered from the guilty officers who had opined the case to be fit for filing an appeal despite the judgment of the Supreme Court in Sanjay Gera vs. Haryana Urban Development Authority & Anr. [(2005) 3 SCC 207]. The Court also directed that the cost of litigation should be calculated and recovered from the guilty officers.

Development of Law

The ratio decidendi of this case is that a development authority cannot demand an additional price for a plot of land from an allottee, simply because the cost of the land increased for the authority, when the allotment letter specifies that additional price is linked to awards under the Land Acquisition Act. This decision reinforces the principle established in Sanjay Gera vs. Haryana Urban Development Authority & Anr. [(2005) 3 SCC 207] and clarifies that the terms of the allotment letter must be strictly adhered to. There is no change in the previous position of the law, but the Court has re-emphasized the need to discourage frivolous litigation.

Conclusion

The Supreme Court dismissed the appeal filed by the Haryana Urban Development Authority (HUDA), affirming the decisions of the lower courts. The Court held that HUDA could not demand an additional price for the plot from Jagdeep Singh, as the increase in land cost was not due to an award under the Land Acquisition Act. The Court also imposed costs on HUDA for filing a frivolous appeal and directed that the costs be recovered from the officers responsible for filing the appeal. This judgment reinforces the importance of adhering to the specific terms of allotment letters and discourages frivolous litigation.