INDORE DEVELOPMENT AUTHORITY versus SMT. SADHANA AGARWAL AND ORS.

INDORE DEVELOPMENT AUTHORITY versus SMT. SADHANA AGARWAL AND ORS.

While cost escalation above the initial estimate is not to be presumed justified, in this instance the substantial increase was explained by material and area changes as well as litigation, and regular updates were provided. Therefore, the Authority's conduct was not arbitrary, and the allottees are liable to pay the revised price plus simple interest, given their possession without rent.

Parties
Appellant: Indore Development Authority; Respondent: Smt. Sadhana Agarwal and Ors.; Intervener: State of Madhya Pradesh
Jurisdiction
India
Judgment Date
07 March 1995
Procedural Posture
Civil Appeal / Appeal From the Judgment and Order of the Madhya Pradesh High Court in Misc. P. No. 83 of 1985
Outcome
Appeal allowed
Legal Topics
Escalation of Flat Costs, Administrative Fairness, Public Housing Schemes
Administrative Law Property Law Escalation of Flat Costs Administrative Fairness Public Housing Schemes

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Parties

Indore Development Authority

Appellant

Smt. Sadhana Agarwal and Ors.

Respondent

State of Madhya Pradesh

Intervener

Procedural Posture

Civil Appeal / Appeal From the Judgment and Order of the Madhya Pradesh High Court in Misc. P. No. 83 of 1985

Legal Issues

  1. 1 Whether the Indore Development Authority acted arbitrarily and without sufficient explanation in escalating the costs of LIG and MIG flats beyond the estimated amounts announced at registration.
  2. 2 Whether allottees are required to pay the escalated amount and interest after being in possession of the flats without rent.

Ratio Decidendi

While cost escalation above the initial estimate is not to be presumed justified, in this instance the substantial increase was explained by material and area changes as well as litigation, and regular updates were provided. Therefore, the Authority's conduct was not arbitrary, and the allottees are liable to pay the revised price plus simple interest, given their possession without rent.

Court Disposition

Appeal allowed

Orders

  • Respondents to pay the balance amount for the flats along with simple interest at the rate of 6% per annum from the date of obtaining possession until payment.
  • No order as to costs.