Bombay HC Upholds MHADA's Right To Revise Flat Price, Gives Pune Allottee Time To Clear Dues

Mumbai, June 26: The Bombay High Court has upheld MHADA's right to revise the price of an allotted flat by factoring in the rise in costs and interest due to the passage of time, while protecting the allottee from eviction by giving him an opportunity to clear the outstanding dues.

Justice M.M. Sathaye partly allowed a petition filed by the Pune Housing and Area Development Board (MHADA), challenging a 2006 appellate order that had reduced the amount payable by the allottee and set aside his eviction.

Dispute Over Flat Price

The case relates to a flat in Pune's Kothrud area allotted to Vithal Ladkat in July 1993 under the State government's 2% discretionary quota. While possession was handed over immediately, the final price was communicated only in May 1995, when MHADA demanded Rs 5.51 lakh.

Ladkat disputed the calculation, claiming the price should be around Rs 1.41 lakh and expressing willingness to pay the lawful amount.

The High Court held that allotment under the government quota does not exempt an allottee from paying the price and other charges legally due under the Maharashtra Housing and Area Development Act and its regulations.

"It does not stand to reason that when a flat is allotted to a citizen under the order of the Government from the 2% quota, he will not be asked for the amount legally due, including the price and other components such as interest," the court observed.

Court Clarifies MHADA Powers

Rejecting MHADA's contention that the Competent Authority could not examine the correctness of the amount demanded, the court held that the authority has the power to determine whether the dues forming the basis of eviction are "lawfully due".

Accepting MHADA's argument, it also ruled that the price of a tenement can be revised to account for escalation and incidental expenses where several years have elapsed between construction and allotment.

"Time elapsed has a direct connection with market appreciation," the court noted, adding that the value of a flat in Kothrud could not be expected to remain unchanged between 1987, when it was constructed, and 1993, when it was allotted.

Allottee Gets Final Opportunity

However, the court found MHADA at fault for waiting nearly two years after allotment to raise the demand. Holding that the Board could not claim interest for that period, it restricted the interest to 9% per annum from May 1995 onwards.

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Since Ladkat has been residing in the flat since 1993, the court declined to order his immediate eviction. Instead, it directed him to pay the recalculated outstanding amount of Rs 3.42 lakh within two weeks, failing which MHADA would be free to initiate eviction proceedings.

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