No surcharge on estimated cost of DDA flats : SC

New Delhi, Dec 17 (UNI) The Supreme Court has held that the Delhi Development Authority (DDA) cannot impose any surcharge on the estimated cost of DDA flats beyond the terms of the brochure.

A bench comprising Justices S P Sinha and Harjit Singh Bedi dismissed the appeals filed by the DDA and allowed those filed by the allottees of Self Financing Scheme (SFS), which was floated by DDA in 1992. The authority vide its orders dated August 16, 1996 had imposed a surcharge of 20 per cent over and above the estimated cost of south Delhi flats.

The apex court, in its judgement dated December 13, while setting aside the judgement of full bench of Delhi High Court, said, ''A contract must be construed so as to lead to a conclusion whose meaning is understood by the parties. The terms of agreement cannot be vague or indefinite and no mechanism has been provided for interpretation of the same.'' It added, ''When a contract has been worked out, a fresh liability cannot be thrust upon a contracting party. It is well settled that a definite price is an essential element of a binding agreement. Although, a definite price need not be stated in the contract but assertion thereof, either expressly or impliedly, is imperative.'' The apex court also ordered the DDA to pay a cost of Rs 25,000 each to the flat owners in relation to the appeals filed by them, saying that the authority could not burden the allottees to augment its revenue.

The court concluded by holding, ''It maybe reiterated that it is only those components, which fall within the brochure of DDA or within the purview of the statutory requirement, can be included in the excercise of price fixation.'' The court also ruled that an executive could not impose a surcharge with retrospective effect, unless and until there was a statutory provision under the rules governing the scheme.

The Delhi High Court judgement dated July 22, 2005 had upheld the imposition of surcharge, permitting the authority to impose 20 per cent surcharge on the ground that most of the petitioners were defaulters with their flats liable to be cancelled and the authority was within its power to impose a surcharge.

UNI