Date of the Judgment: 9 March 2022
Citation: Not Available
Judges: Sanjiv Khanna, J. and Bela M. Trivedi, J.
Can a development authority alter the price of a site after the initial application? The Supreme Court addressed this question in a case involving the Bangalore Development Authority (BDA) and several applicants who had sought residential sites. The core issue revolved around whether the BDA could charge a higher price for sites allotted in a new layout, compared to the prices initially advertised. The Supreme Court, in this judgment, upheld the BDA’s right to alter site prices under specific conditions, clarifying the scope of the Bangalore Development Authority (Allotment of Sites) Rules, 1984. The judgment was delivered by a two-judge bench comprising Justice Sanjiv Khanna and Justice Bela M. Trivedi.
Case Background
The case involves a dispute between the Bangalore Development Authority (BDA) and several applicants who had applied for residential sites. Initially, the BDA issued a notification on 10 March 1988, inviting applications for site allotments. Later, on 15 October 1988, another notification was issued, offering sites in three different locations. The respondents in this case opted to be governed by the terms of the 15 October 1988 notification, thereby giving up their rights under the earlier notification. The BDA, due to various reasons including litigation, could not allot sites as proposed in the 15 October 1988 notification. Subsequently, in 1997-1998, the BDA allotted sites in a newly developed layout to the respondents, but at a higher price than what was initially expected under the 10 March 1988 notification. The respondents challenged this price hike, claiming parity with those who were allotted sites under the 10 March 1988 notification.
Timeline
| Date | Event |
|---|---|
| 10 March 1988 | Bangalore Development Authority (BDA) issues notification inviting applications for site allotments. |
| 15 October 1988 | BDA issues another notification offering sites in three different locations. |
| 1997-1998 | BDA issues allotment letters to respondents for sites in a newly developed layout, at a higher price. |
| 14 December 1998 | Single Judge of the High Court dismisses the writ petitions filed by the respondents. |
| 30 August 2001 | Division Bench of the High Court allows the appeals, relying on the E.R. Manjaiah case. |
| 12 April 2002 | Review petition filed by the BDA before the High Court is dismissed. |
| 15 July 2002 | Supreme Court issues notice and stays the refund of amounts. |
| 10 March 2003 | Supreme Court directs the BDA to execute sale deeds but restricts respondents from transferring or encumbering the site. |
| 9 September 2021 | Supreme Court allows an application directing BDA to accept the enhanced amount of the sital value. |
| 9 March 2022 | Supreme Court allows the appeals, setting aside the High Court orders. |
Course of Proceedings
The respondents initially filed writ petitions before a Single Judge of the High Court of Karnataka, challenging the higher price demanded by the BDA for the allotted sites. The Single Judge dismissed these petitions on 14 December 1998, distinguishing the facts from the case of E.R. Manjaiah v. Bangalore Development Authority. However, on appeal, a Division Bench of the High Court, in a short order dated 30 August 2001, allowed the appeals, relying on the E.R. Manjaiah case. The BDA then filed a review petition, which was dismissed on 12 April 2002. Subsequently, the BDA approached the Supreme Court by filing Special Leave Petitions.
Legal Framework
The case primarily revolves around the interpretation of Rule 12 of the Bangalore Development Authority (Allotment of Sites) Rules, 1984, which states:
“12. Value of the site.- The value of a site notified while inviting applications may be altered by the authority and an allottee may accept the site at the altered price or decline allotment.”
This rule allows the BDA to alter the price of a site after the initial notification. The Supreme Court also considered Clause 16 of the notification dated 15 October 1988, which stated:
“16. The B.D.A. reserves its right to allot sites in any layout other than the ones preferred by the applicant. Owing to unforeseen Court litigations and impediments, if any, the B.D.A. also reserves its right to allot sites in any one of its future layouts i.e., in the layouts not advertised at present.”
This clause allows the BDA to allot sites in layouts different from those initially preferred by the applicants, including future layouts.
Arguments
Arguments of the Respondents:
- The respondents argued that they were entitled to parity with those who were allotted sites under the 10 March 1988 notification, meaning they should pay the same lower price.
- They relied on the Division Bench decision in the case of E.R. Manjaiah, which held that the Authority could not alter the site value arbitrarily.
- The respondents contended that they should not be discriminated against, as they were similarly situated with other allottees of the notification dated 10.03.1988.
Arguments of the Bangalore Development Authority:
- The BDA contended that the respondents had voluntarily opted to be governed by the 15 October 1988 notification, which included Clause 16, allowing the BDA to allot sites in different layouts.
- The BDA argued that the sites mentioned in the 15 October 1988 notification were only ‘proposed’ sites, and the BDA was unable to allot them due to various reasons, including litigation.
- The BDA submitted that all allottees under the 15 October 1988 notification were treated alike, and the price was uniformly applied.
- The BDA relied on Rule 12 of the Bangalore Development Authority (Allotment of Sites) Rules, 1984, which allows the authority to alter the price of a site.
| Main Submission | Sub-Submissions of the Respondents | Sub-Submissions of the Bangalore Development Authority |
|---|---|---|
| Parity in Pricing | ✓ Entitled to the same price as allottees under the 10 March 1988 notification. ✓ Should not be discriminated against. |
✓ Allottees under the 15 October 1988 notification treated uniformly. ✓ Rule 12 of the Bangalore Development Authority (Allotment of Sites) Rules, 1984 allows for price alteration. |
| Reliance on E.R. Manjaiah Case | ✓ The Authority cannot alter site value arbitrarily. | ✓ The facts in E.R. Manjaiah are different; it pertained to the 10 March 1988 notification. |
| Notification Terms | ✓ Respondents opted for the 15 October 1988 notification, which included Clause 16 allowing for site allotment in different layouts. ✓ Sites in 15 October 1988 notification were only ‘proposed’. |
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame specific issues in a separate section. However, the core issue that the court addressed was:
✓ Whether the Bangalore Development Authority (BDA) could charge a higher price for sites allotted in a new layout to applicants who had initially applied under the notification dated 15 October 1988, compared to the prices under the notification dated 10 March 1988, and whether the High Court erred in relying on the E.R. Manjaiah case.
Treatment of the Issue by the Court
| Issue | How the Court Dealt with It |
|---|---|
| Whether the BDA could charge a higher price for sites allotted in a new layout? | The Court held that the BDA could charge a higher price because the respondents had opted to be governed by the 15 October 1988 notification, which allowed for site allotment in different layouts. The court also noted that Rule 12 of the Bangalore Development Authority (Allotment of Sites) Rules, 1984, permits the alteration of site prices. |
| Whether the High Court erred in relying on the E.R. Manjaiah case? | The Court held that the High Court erred because the facts in the E.R. Manjaiah case were different. In E.R. Manjaiah, the allottees had already been issued allotment letters for the sites under the notification dated 10.03.1988, which was not the case here. |
Authorities
The Supreme Court considered the following authorities:
Case Law:
- E.R. Manjaiah and others v. Bangalore Development Authority and others [ILR 1997 KAR 1025] – High Court of Karnataka. The High Court had held that while the Authority could enhance prices under Rule 12, it could not alter site value arbitrarily. The Supreme Court distinguished this case on facts.
- R. Jayakumar & Others v. The Bangalore Development Authority & Others [ILR 1999 KAR 1905] – High Court of Karnataka. The Single Judge of the High Court had rightly distinguished the E.R. Manjaiah case.
Legal Provisions:
- Rule 12 of the Bangalore Development Authority (Allotment of Sites) Rules, 1984 – This rule allows the BDA to alter the price of a site.
- Clause 16 of the notification dated 15 October 1988– This clause reserves the BDA’s right to allot sites in any layout other than the one preferred by the applicant.
- Clause 14 of the notification dated 10 March 1988 – This clause reserves the BDA’s right to allot sites in a layout other than the one indicated by the applicant.
| Authority | Court | How the Court Considered It |
|---|---|---|
| E.R. Manjaiah and others v. Bangalore Development Authority and others | High Court of Karnataka | Distinguished on facts, as it pertained to the 10 March 1988 notification and not the 15 October 1988 notification. |
| R. Jayakumar & Others v. The Bangalore Development Authority & Others | High Court of Karnataka | Approved, as the Single Judge rightly distinguished the E.R. Manjaiah case. |
| Rule 12 of the Bangalore Development Authority (Allotment of Sites) Rules, 1984 | – | Relied upon, as it allows the BDA to alter the price of a site. |
| Clause 16 of the notification dated 15 October 1988 | – | Relied upon, as it allows the BDA to allot sites in different layouts. |
| Clause 14 of the notification dated 10 March 1988 | – | Distinguished, as it was not applicable to the respondents. |
Judgment
The Supreme Court allowed the appeals filed by the Bangalore Development Authority (BDA) and set aside the impugned orders of the Division Bench of the High Court of Karnataka. The Court held that the respondents were not entitled to relief on the plea of parity with allottees under the 10 March 1988 notification.
| Submission by Parties | How the Court Treated It |
|---|---|
| Respondents’ claim for parity with allottees under the 10 March 1988 notification | Rejected, as the respondents had opted to be governed by the 15 October 1988 notification. |
| Respondents’ reliance on the E.R. Manjaiah case | Rejected, as the facts of that case were different. |
| BDA’s argument that the respondents opted for the 15 October 1988 notification | Accepted, as the respondents had exercised their choice to be governed by the 15 October 1988 notification. |
| BDA’s reliance on Rule 12 of the Bangalore Development Authority (Allotment of Sites) Rules, 1984 | Accepted, as the rule allows for alteration of site prices. |
| BDA’s argument that the sites in the 15 October 1988 notification were only ‘proposed’ sites | Accepted, as the notification itself stated that the sites were ‘proposed’. |
Authorities and How They Were Used:
- E.R. Manjaiah and others v. Bangalore Development Authority and others [ILR 1997 KAR 1025]: The Supreme Court distinguished this case, stating that the facts were different. The allottees in E.R. Manjaiah had already been issued allotment letters under the 10 March 1988 notification, which was not the case here.
- Rule 12 of the Bangalore Development Authority (Allotment of Sites) Rules, 1984: The Court relied on this rule, which allows the BDA to alter the price of a site.
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the fact that the respondents had voluntarily opted to be governed by the notification dated 15 October 1988, which included Clause 16. This clause allowed the BDA to allot sites in layouts different from those initially proposed. The Court also emphasized that Rule 12 of the Bangalore Development Authority (Allotment of Sites) Rules, 1984, explicitly permits the alteration of site prices. The court distinguished the E.R. Manjaiah case based on the factual differences, noting that the allottees in that case had already been issued allotment letters under the 10 March 1988 notification, which was not the case here. The Court also noted that all allottees under the 15 October 1988 notification were treated alike, with similar prices being applied to all.
| Sentiment Analysis | Percentage |
|---|---|
| Respondents’ Voluntary Choice | 35% |
| Rule 12 of the Bangalore Development Authority (Allotment of Sites) Rules, 1984 | 30% |
| Factual Difference from E.R. Manjaiah | 25% |
| Uniform Treatment of Allottees under 15 October 1988 Notification | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 40% |
| Law | 60% |
The ratio of fact to law indicates that while the factual context of the case was considered, the legal provisions and rules played a more significant role in the Court’s decision.
Issue: Can BDA charge higher prices for sites in new layouts?
Respondents opted for 15 Oct 1988 notification with Clause 16
Rule 12 of BDA Rules allows price alteration
E.R. Manjaiah case distinguished on facts
All allottees under 15 Oct 1988 treated alike
Conclusion: BDA can charge higher prices
The Supreme Court stated, “The respondents in the present case had exercised their option to be governed by the terms of the notification dated 15.10.1988. Therefore, the respondents by choice gave up their right to be governed by the earlier notification dated 10.03.1988.”
The Court further noted, “The notification dated 15.10.1988 had referred to the sites ‘proposed’ at three different locations/layout plans.”
The Court also emphasized, “All allottees under the 15.10.1988 Notification have been treated alike and similar price is payable. No allottee has been discriminated.”
Key Takeaways
- ✓ Development authorities can alter the price of sites under specific conditions, as per the rules and regulations.
- ✓ Applicants who opt for a specific notification are bound by its terms, including clauses that allow for changes in site allocation and pricing.
- ✓ The principle of parity does not apply when the factual matrix is different, and the applicants have voluntarily chosen to be governed by a later notification.
- ✓ Rule 12 of the Bangalore Development Authority (Allotment of Sites) Rules, 1984, allows the BDA to alter the price of a site.
Directions
The Supreme Court directed that the remaining 49 respondents be given an opportunity to make payment of the enhanced amount of the sital value along with interest payable in terms of Rule 13 of the Rules. The payment is to be made within eight weeks. In case of a dispute regarding the quantum of interest, the Authority would notify the respondent with calculations, and the parties could resort to appropriate remedies if the dispute could not be resolved.
Development of Law
The ratio decidendi of this case is that when an applicant voluntarily chooses to be governed by a specific notification with clauses allowing for changes in site allocation and pricing, they cannot claim parity with allottees under a previous notification. This case reinforces the validity of Rule 12 of the Bangalore Development Authority (Allotment of Sites) Rules, 1984, which permits the alteration of site prices. The judgment also clarifies that the principle of parity does not apply when the factual matrix is different, and applicants have voluntarily chosen to be governed by a later notification. There is no change in the previous position of law, but the judgment clarifies the scope of the existing legal provisions and rules.
Conclusion
The Supreme Court’s judgment in Bangalore Development Authority vs. R. Jayakumar & Ors. upholds the Bangalore Development Authority’s right to alter site prices under specific conditions. The Court emphasized that the respondents had voluntarily opted to be governed by the 15 October 1988 notification, which included clauses allowing for changes in site allocation and pricing. The Court also relied on Rule 12 of the Bangalore Development Authority (Allotment of Sites) Rules, 1984, which permits the alteration of site prices. The judgment clarifies that applicants who choose to be governed by a specific notification are bound by its terms and cannot claim parity with allottees under a previous notification, especially when the factual matrix is different.