Smt. Nirmala Dixit vs State of U.P. and Others

K.J. Shetty, C.J.—The U. P. Housing Development Board, Lucknow has constructed some houses for the benefit of persons belonging to the category of Middle Income Group (M.I.G.) of Gorakhpur. The persons belonging to MIG must not have annual income beyond Rs. 18,000/-. The petitioner who belongs to that category has applied for one of the houses. She made the application in 1980, along with registration fee of Rs. 5000/-. She was, then intimated that the approximate cost of the house would be within the range of Rs. 27,000/- to Rs. 32,000/- which was required to be payable in 144 monthly installments of Rs. 265/- to Rs. 340/- spread over to 12 years. She was asked to pay interest at the rate of 10% to 11% interest.

In 1985, the petitioner was allotted a house bearing No. A-275. She was asked to pay the first installment in a sum of Rs. 2000/-inclusive of other charges. She was served with a notice directing to deposit Rs. 26,448.25 before July, 31,1985. In the said notice it has been stated that the approximate cost of the house has been increased from Rs. 32,000/-to Rs. 1,17,465/-and the rate of interest has been enhanced from 10% to 15.5%. The period for payment of installments has been reduced from 144 months to 120 months. The monthly installment has been determined at Rs. 1358.25 instead of Rs. 265/--.

Challenging the validity of the demand made, the petitioner has approached this court for relief under Article 226 of the Constitution.

We are not concerned in this petition whether the house allotted to the petitioner would cost Rs. 1,17,465/-or not. That is a matter for the Housing Board to determine with regard to the cost of construction and incidental charges. We are only examining whether the demand made by the Housing Board is reasonable and not arbitrary. The Housing Board is a Statutory Body. Its activities in construction and allotment of houses should be on no profit and no loss basis. It cannot impose conditions on the allottees which are unbearable, unreasonable and unworkable. It is on this basis that we have to examine the terms of payment provided with the conditions imposed on the petitioner.

If one looks at the revised terms in comparison with the earlier terms prescribed at the time of applying for the house, it is obvious that the Housing Board has not applied to the hardship that causes to the allottees. The question whether a person belonging to MIG with an annual income of Rs. 18,000/-could be able to pay Rs. 1358.25 per month and if he is asked to do so, how he could survive and how he could meet his other requirements in life. One does not know the need to reduce the period of installments from 144 to 120. One also does not know for enhancing of rate of interest from 10% to 14.5%. These aspects appear to have not been borne in mind.

It seems to us, that the liability to pay installment @ Rs. 1358.25 per month by a person belonging to MIG has been arbitrarily determined. It is proper for the Housing Board to frame an acceptable scheme in this regard. There is no use of any scheme which is difficult to be complied with. The Board has been constituted for the public benefit. It cannot ignore the problems of people and facts of life. Any scheme for allotment of houses and repayment of loan should be within the means of persons to whom the scheme is meant for. It should not be divorced from the hard realities of life.

Our view finds support from the decision of this Court in Ajai Pal Singh and Others Vs. Bareilly Development Authority, Bareilly and Another,

In the result, we allow the petition; direct the Housing Board to frame a reasonable scheme in regard to payment of installments with regard to houses allotted to MIG. In the meantime, the Housing Board shall not enforce the impugned notice dated July 6, 1985 (Annexure-3).

Copy of order may be given to the petitioner on payment of usual charges.