R.Ganesh Babu v. The Managing Director

IN THE HIGH COURT OF JUDICATURE AT MADRAS Reserved on Pronounced on

25.03.2026

30.03.2026 CORAM THE HONOURABLE MR. JUSTICE M.DHANDAPANI W.P. NOS. 4465, 4467, 4468, 4471, 4491, 4495, 4500, 4504, 18798 & 19623 OF 2024 AND W.M.P. NOS. 21477, 20617, 20618, 4866, 4826, 4828, 4851, 4863, 4825, 4827 & 4845 OF 2024 R.Ganesh Babu .. Peoner in WP 4465/2024 S.Balamuralidhar .. Peoner in WP 19623/2024 Provash Naskar .. Peoner in WP 18798/2024 Dr.J.Dinesh Raj .. Peoner in WP 4467/2024 Dr.Ch.Satyanarayana .. Peoner in WP 4468/2024 Diveysh P Davey .. Peoner in WP 4471/2024 B.Padmanaba Rao .. Peoner in WP 4491/2024 S.Jayachandran .. Peoner in WP 4495/2024 M.Boominathan .. Peoner in WP 4500/2024 Jayakumar Kachapeshwaran .. Peoner in WP 4504/2024 -Vs -

¶1The Managing Director Tamil Nadu Housing Board CMDA Complex, E & C Market Road Koyambedu, Chennai 600 107.

¶2The Manager Marketng & Service Besant Nagar Division Tamil Nadu Housing Board Chennai 600 020.

¶3The Chief Engineer (City) Tamil Nadu Housing Board CMDA Complex, E & C Market Road Koyambedu, Chennai 600 107.

¶4The Executve Engineer & Administratve O=cer Tamil Nadu Housing Board Besant Nagar Division Chennai 600 020. .. Respondents in all WPs W.P. No.4465 of 2024 >led under Artcle 226 of the Consttuton of India praying this Court to issue a writ of certorari>ed mandamus to call for the records relatng to the impugned order in LeAer 05.10.2021 in LeAer ndNo.AL.5/492/2016 passed by the 2 respondent quash the same and further nddirect the 2 respondent to execute sale deed in favour of the pettoner in st respect of the Cat alloAed to the pettoner bearing LIG I Flat No.02/06 in 1 Floor, TNHB 1500 MSB Flats, Phase II, TNHB Main Road, Sholinganallur, Chennai 600 119. WP No. 19623 of 2024 >led under Artcle 226 of the Consttuton of India praying this Court to call for the records relatng to the impugned order in LeAer

11.01.2022 in LeAer No.AL.1/796/2015 passed by the 2nd respondent quash the same and further direct the 2nd respondent to execute Sale Deed in favour of the pettoner in respect of the Flat alloAed to the pettoner bearing MIG I Flat No.14/7 in 2nd Coor, TNHB 1500 MSB Flats phase II, TNHB Main Road, Sholinganallur Chennai-600 119. WP No. 18798 of 2024 >led under Artcle 226 of the Consttuton of India praying this Court to call for the records relatng to the impugned order in LeAer

30.06.2022 in LeAer No.AL-1/ 326/ 2016 passed by the 2nd respondent quash the same and further direct the 2nd respondent to execute Sale Deed in favour of the pettoner in respect of the Flat alloAed to the pettoner bearing MIG Flat No.MI 15/16 in 4th Floor, TNHB 1500 MSB Flats, Phase II, TNHB Main Road, Sholinganallur, Chennai-600 119. WP No. 4467 of 2024 >led under Artcle 226 of the Consttuton of India praying this Court to call for the records relatng to the Impugned Order in LeAer

24.05.2022 in LeAer No.AL.1 / 135 / 2016 passed by the 2nd respondent quash the same and further direct the 2nd respondent to execute Sale Deed in favour of the pettoner in respect of the Flat alloAed to the pettoner bearing HIG I Flat No.H 7/19 in 5th Floor, TNHB 1500 MSB Flats, Phase II, TNHB Main Road, Shollinganallur, Chennai-600119. WP No. 4468 of 2024 >led under Artcle 226 of the Consttuton of India praying this Court to call for the records relatng to the Impugned Order in LeAer

23.05.2022 in LeAer No.AL.1 / 878 / 2015 passed by the 2nd respondent quash the same and further direct the 2nd respondent to execute Sale Deed in favour of the pettoner in respect of the Flat alloAed to the pettoner bearing MIG II Flat No.8/30 in 5th Floor, TNHB 1500 MSB Flats, Phase II, TNHB Main Road, Shollinganallur, Chennai-600119. WP No. 4471 of 2024 >led under Artcle 226 of the Consttuton of India praying this Court to call for the records relatng to the Impugned Order in LeAer

24.11.2021 in LeAer No.AL.1 / 1098 / 2015 passed by the 2nd respondent quash the same and further direct the 2nd respondent to execute Sale Deed in favour of the pettoner in respect of the Flat alloAed to the pettoner bearing MIG Flat No.M I 2/8 in 3rd Floor, TNHB 1500 MSB Flats, Phase II, TNHB Main Road, Shollinganallur, Chennai-600119. WP No. 4491 of 2024 >led under Artcle 226 of the Consttuton of India praying this Court to call for the records relatng to the Impugned Order in LeAer No. AL.3 / 702459/ 2015 dated 15.07.2021 passed by the 2nd respondent quash the same and further direct the 2nd respondent to execute Sale Deed in favour of the pettoner in respect of the Flat alloAed to the pettoner bearing HIG Flat No.H-1/35 in the 9th Floor, TNHB 1500 MSB Flats, Phase II, TNHB Main Road, Shollinganallur, Chennai-600 119. WP No. 4495 of 2024 >led under Artcle 226 of the Consttuton of India praying this Court to call for the records relatng to the Impugned Order in LeAer No. AL.3 / 702415/ 2015 dated 15.07.2021 passed by the 2nd respondent quash the same and further direct the 2nd respondent to execute Sale Deed in favour of the pettoner in respect of the Flat alloAed to the pettoner bearing HIG Flat No.H-2/12 in the 3rd Floor, TNHB 1500 MSB Flats, Phase II, TNHB Main Road, Shollinganallur, Chennai-600 119. WP No. 4500 of 2024 >led under Artcle 226 of the Consttuton of India praying this Court to call for the records relatng to the Impugned Order in LeAer No. AL.5 / 804920/ 2015 dated 15.10.2021 passed by the 2nd respondent quash the same and further direct the 2nd respondent to execute Sale Deed in favour of the pettoner in respect of the Flat alloAed to the pettoner bearing HIG Flat No.L-3/09 in the 2nd Floor, TNHB 1500 MSB Flats, Phase II, TNHB Main Road, Shollinganallur, Chennai-600 119. WP No. 4504 of 2024 >led under Artcle 226 of the Consttuton of India praying this Court to call for the records relatng to the Impugned Order in LeAer No. AL.1 / 804965/ 2015 dated 09.09.2021 passed by the 2nd respondent quash the same and further direct the 2nd respondent to execute Sale Deed in favour of the pettoner in respect of the Flat alloAed to the pettoner bearing LIG Flat No.L-2/13 in the 2nd Floor, TNHB 1500 MSB Flats, Phase II, TNHB Main Road, Shollinganallur, Chennai-600 119. For Pettoners : Ms. Sudharshana Sundar for M/s. V.V.Sathya & B.M.Kirsh Kishan For Respondents : Mr. P.S.Raman, SC for Mr. D.Veerasekaran COMMON ORDER The >nal cost arrived at by the respondents claiming it to be additonal cost in respect of the Cats sold to the respectve pettoners which was alloAed pursuant to the advertsement published during the year 2014 and 2015 under the Hire Purchase Scheme is put in issue before this Court through the present pettons.

¶2The facts in a nutshell, as could be culled out from the writ pettons, is summarised as under :- The Tamil Nadu Housing Board (for short 'the Board') invited applicatons under the Hire Purchase Scheme on 21.7.2014, which was concluded on

19.8.2014. In view of the lesser takers, the advertsement was once again republished between July and September, 2015. The Cats were constructed in four categories, viz., HIG, MIG-I, MIG-II and LIG with the tentatve cost being >xed at Rs.58,60,000/-, Rs.40,71,000/=, Rs.40,64,000/= and Rs.27,33,000/= with a note that the >nal cost will be informed at the tme of handing over.

¶3It is the further case of the pettoners that consequent to the said advertsements, the respectve pettoners submiAed their inital applicaton on various dates as mentoned in the writ petton, with which there is no quarrel, and the tentatve cost, as stated in the above was >xed and towards inital payment, the respectve pettoners also submiAed the said amount.

¶4It is the further case of the pettoners that allotment intmaton leAers were issued provisionally alloLng the respectve Cats to the respectve pettoners with a clear stand that the cost of the Cat will be informed aMer completon of 80% of the constructon work and that the payment details and other monthly instalment will be informed at the tme of issue of allotment order. It is the further averment of the pettoners that the respondent have not intmated the cost of the Cat as communicated, but the fact remains that the pettoners have paid the entre amount to the respondents as per the value >xed in the advertsement towards the cost of the Cat.

¶5It is the further averment of the pettoners that provisional allotment was issued in the year 2017 in which the tentatve cost was >xed and the pettoners were directed to pay 25% of the Cat cost on or before 30 days from the date of receipt of the provisional allotment order.

¶6It is the further averment of the pettoners that a regular allotment order was issued in the year 2018 demanding the balance price towards the cost of the Cat, which was also duly complied with by the pettoners and that the pettoners took over possession of their respectve Cats. In >ne, it is the case of the pettoners that they have paid not only the applicaton money and the 25% cost, but also the entre balance cost of the Cat, as prescribed in the advertsement. Further lease-cum-sale agreement was entered into with the Board by the respectve pettoners.

¶7When It is the further averment of the pettoners that when the maAer stood thus, to their shock and surprise, the respectve impugned leAers were by the pettoners in which the Board had communicated the >nal cost arrived at for the respectve Cats and called upon the respectve pettoners to pay the diOerental amount with interest. It is the speci>c case of the pettoners that in the said leAer, the manner in which the said amount has been arrived at has not been speci>ed and further the said >xaton is exorbitant notwithstanding the fact that the pettoners have paid the full amount towards the sale consideraton of the Cats.

¶8It is the averment of the pettoners that the demand of additonal cost is without any basis and against the principles and procedures laid down for such receipt. It is the further averment of the pettoners that though the constructon cost was initally >xed for the various types of Cats, viz., HIG, MIG-I, MIG-II an LIG at diOerent rates, however, through the present claim, the constructon cost for all the Cats were >xed uniformly at Rs.3341/- per sq.M. It is the further averment of the pettoners that the cost was initally >xed by adoptng the PWD rates, which includes the pro>t for the Board and contract for constructon was given and, therefore, there could be no increase in cost due escalaton and, therefore, higher rate cannot be >xed by the respondents.

¶9It is the further averment of the pettoners that the cost of the Cats should be >xed on the basis of the land value, which was paid while the lands were acquired plus the additonal pro>t for the Board. However, inspite of the land cost having been >xed at Rs.744/- per sq.M., and there being no appeal resultng in re>xaton of the cost at any higher value, the land was sold at Rs.2,600/- per sq.M., to the pettoners and further even if interest is sought to be collected by the Board, then it should be only on the actual rate paid to the land and it cannot be on the market value of the land. Therefore, the >xaton of the cost as also the charging of interest on the market value, which formed the determinaton of the escalated additonal cost is erroneous.

¶10It is the further averment of the pettoner that the interest which is demanded on the constructon cost tll March, 2018 is also arbitrary and such interest cannot be demanded from the pettoners. It is the further averment of the pettoners that a representaton was sent by the Associaton highlightng the points, but the same has not evoked any response and, therefore, leM with no other alternatve, the pettoners have come before this Court >ling the present pettons assailing the impugned demand of additonal cost, labelled as >nal cost.

¶11Learned counsel appearing for the pettoners submiAed that when the land cost itself, which was >xed during the period of land acquisiton was less, the said value ought to have been the guiding factor in arriving at the cost to be >xed as the sale price of the land, but the Board had >xed the market value and has demanded the amount from the pettoners along with compound interest, which cannot be sustained.

¶12It is the further submission of the learned counsel that the interest demand made towards project period interest tll March, 2018 is also contrary to the agreement as the said agreement does not contemplate charging of interest. It is the further submission of the learned counsel that though the entre cost of the Cat, which has been >xed, has been paid by the respectve pettoners, more than three years aMer the said period, the >nal cost is alleged to have been arrived at, which is running to lakhs of rupees and interest is also being charged on the said cost without any basis and no valid reason has been given for demanding such high amount from the pettoners. When the pettoner has paid the lumpsum amount, which has been >xed towards the cost of the Cat and entered into the lease-cum-sale agreement, which has >xed the cost of the Cat, the Board cannot, posterior in point of tme come and claim any additonal amount as >nal cost.

¶13It is the further submission of the learned counsel that though the advertsement states that the >nal cost will be informed at the tme of handing over, however, the constructon costs have been carefully determined even prior which includes escalaton so as to protect the investors from additonal burden. However, the Board has not informed the >nal cost within two months from the date of handing over of the Cat and it was communicated only three years aMer and, therefore, imposing interest on the belated claim made by the Board is grossly impermissible.

¶14It is the further submission of the learned counsel that the cost for constructon have been >xed taking into account the escalaton factor, which also includes the pro>t margin for the Board and, therefore, the claim of the Board for higher rates alleging escalaton in costs is wholly unjust>ed and unsustainable. In this regard, it is pointed out by the learned counsel that the sale agreement clearly provides that the cost is >xed tentatvely and any diOerence in cost is to be intmated within two months from the date of completon, however, the Board had taken three years to arrive at the >nal cost, which cannot be imposed on the pettoners, that too along with interest.

¶15It is the further submission of the learned counsel that as per the proceedings dated 22.10.2016, the Board had intmated that the cost of the Cat will be informed upon completon of 80% of constructon. The Cats were completely constructed by 14.2.2018, but the communicaton relatng to the additonal cost claimed to be the >nal cost was demanded only aMer three years from 14.2.2018, which is against the Board's proceedings. In view of the above infractons, the impugned order passed by the Board is grossly illegal, erroneous, arbitrary and unreasonable and the same deserves to be interfered with.

¶16Per contra, learned senior counsel appearing for the Board, even at the outset, submiAed that neither the advertsement nor the provisional allotment order speci>es the >nal cost and in fact, the very averment of the pettoners in the a=davit accepts the very factum. It is further submiAed that the provisional allotment order clearly stpulates that the pettoners agree to pay the amount asked for in additon to the price >xed by the Board in case of unexpected contngencies not included in the estmate regarding the implementaton of the project.

¶17It is the further submission of the learned senior counsel that it is the prerogatve of the Board to >x the >nal price at its sole discreton based on the price of the land acquired under the Land Acquisiton Act together with suitable modi>caton and the price >xed by the vendor in respect of the Cat/house is >nal and binding on the purchaser and the purchaser has no rights to seek for >xaton of price at his choice.

¶18It is the further submission of the learned senior counsel that even the sale agreement entered into between the partes clearly state that the rate agreed upon at the >rst instance is only a tentatve price and not the >nal price, which has been agreed by the pettoners. Further, it is submiAed that the guideline value as well as the market value of the land is taken into account for the purpose of >xaton of the land price and as per the Board norms, the higher of the two is considered and, therefore, the Board had >xed the land cost on the basis of the market value.

¶19It is the further submission of the learned senior counsel that it is not necessary for the Board to adopt the guideline value while >xing the cost of the land, as even under the Land Acquisiton Act, while taking into consideraton the guideline value of the land, the cost of the land given is worked out by giving solatum and other bene>ts for the land, in additon to the guideline value and, therefore, >xaton of land cost merely on the basis of the guideline value as sought for by the pettoner cannot be done and it is per se erroneous.

¶20It is the further submission of the learned senior counsel that even as per the clauses in the lease cum sale agreement, more speci>cally conditon No.10, interest could be claimed by the Board and the purchaser is bound to pay the same as also on any arrears and service charges and, therefore, it cannot be claimed by the pettoners that interest is not leviable.

¶21It is the further submission of the learned senior counsel that as per the lease-cum-sale agreement entered into between the Board and the purchaser, the purchasers had agreed to pay the >nal cost as and when demanded by the Board and what is initally >xed is only a tentatve cost. Even in the provisional allotment order, the same has been clearly mentoned and accepted by all the purchasers and, therefore, the purchasers cannot go back on their agreement. Further, the said commitment and acceptance is irrespectve of whether it is through the own fund of the purchasers or through loan taken from >nancial insttutons as the cost >xed is only tentatve and not >nal. Therefore, the contenton of the pettoners that the tentatve cost becomes >nal once the amount is paid in full, as speci>ed in the lease-cum-sale agreement is erroneous and an erroneous interpretaton of the provisions of the lease-cum-sale agreement.

¶22It is the further submission of the learned senior counsel that as per the lease-cum-sale agreement, no conditon has been mentoned about >xing the >nal cost within two months and >nal cost has been revised based on the representaton of the Associaton dated 1.8.2022 for reducton in cost and, therefore, there is no delay on the part of the Board.

¶23It is the further submission of the learned senior counsel that equal selling price for self >nance scheme and hire purchase scheme could not be considered as they are two diOerent modes of allotment. Further, the >nal selling price was approved by the Pricing CommiAee of the Board and based on the representaton of the Associaton, the cost was reduced by reducing the supervisory charges and pro>ts, which was spread across all the diOerent types of tenements. Therefore, the pettoners, as a maAer of right, cannot seek for the >nal cost >xed to be excluded as it is not part of the agreement entered into between the Board and the purchasers. Accordingly, he seeks for dismissal of the present pettons.

¶24This Court gave its careful consideraton to the submissions advanced by the learned counsel appearing on either side and perused the materials available on record.

¶25The factum that the purchasers entered into the lease-cum-sale agreement is not denied. Further there is a clear admission in the a=davit >led on behalf of the pettoners that the advertsement as well as the lease-cum-sale agreement entered into between the partes clearly menton the sale consideraton at the >rst instance as a tentatve cost and the >nal cost to be arrived at a later point of tme. When the pettoners themselves have admiAed that the agreement between the partes has only >xed the cost of the Cat as a tentatve cost, the pettoners cannot try to wriggle out of the same and claim that it is the >nal cost, which has been agreed to between the partes.

¶26The pettoners/purchasers as well as the Board are privy to the agreement and both have understood the terms of the agreement before entering into the same. The pettoners, with open eyes, have accepted the price, which was >xed in the lease-cum-sale agreement as the tentatve cost and the >nal cost to be determined at a later point of tme, which would be honoured by the purchasers. Further, the tabulated statement provided by the Board also clearly depicts that the amount shown while entering into the lease-cum-sale agreement is a tentatve cost and that the >nal cost would be determined later. Such being the case, the pettoners cannot come before this Court and claim that the >xaton of >nal cost by the Board is wrong as the cost, which was advertsed is the >nal cost, which has been agreed upon. Therefore, the contenton of the pettoners on this ground deserves outright rejecton.

¶27Coming to the issue of >xaton of land value, which, according to the pettoners, ought to have been >xed based on the guideline value, as it should have been determined on the land cost >xed in the award under the land acquisiton proceedings. The contenton of the pettoners cannot be countenanced for the simple reason that while >xing the land cost under the land acquisiton proceedings, the >xaton of value depends not only on the guideline value, but on other factors as well and while paying the compensaton to the land losers, towards the market value of the land, the award is passed by including solatum, which oO-sets the rate towards the market value and the cost of the land is to be read by taking the land value and solatum together. Therefore, the contenton of the pettoner that the guideline value would be the determining factor is grossly erroneous. Further, the >xaton of the land cost cannot be primarily be on the land value >xed in the acquisiton proceedings, as many value clubbed together goes to determine the value paid to the land loser for the lands and not the guideline value alone and, therefore, the >xaton of market value of the land for determining the >nal cost of the land to be paid by the pettoners cannot be held to be arbitrary or unreasonable.

¶28The only contenton that remains to be decided is the interest imposed on the >nal value to be paid by the pettoners. In this regard, the stand of the pettoners is that aMer three years from the date of hand over of the Cats in the year 2018, the >nal cost has been arrived at in the year 2021 and not only the >nal cost is called upon to be paid, but in additon to the above, interest is levied on the said amount. This, according to the pettoners, is erroneous as the delay had been occasioned on account of the Board in determining the >nal cost and the said delay cannot be put against the pettoners by imposing interest on the amount which is determined to be payable towards the >nal cost.

¶29It is the case of the pettoners that the >nal cost, if at all collectable, ought to have been determined within two months from the date on which the Cats were taken possession by the purchasers and the delay on the part of the Board cannot be put against them in the form of interest, which is countered by the Board by submiLng that there is no clause in the agreement, which calls for determinaton within a period of two months and, therefore, what is not provided in the agreement cannot be sought to be enforced by the purchasers/pettoners.

¶30It is to be pointed out that no conditon with regard to the period within which the >nal cost should be determined and a claim made by the Board against the purchasers is provided in the agreement. Therefore, the period of two months for arriving at the >nal cost cannot be pressed into service by the pettoners. But equally it is to be pointed out that the Board cannot sit over the maAer for interminable tme and, thereaMer, on a >ne day, aMer a period of three years, determine the >nal cost of the Cats and call upon the pettoners/purchasers to pay the same together with interest for the entre period from the date when possession has been taken tll the date on which the payment is made.

¶31Interest is leviable and collectble by the Board for any delay occasioned by the purchasers in paying the >nal value that is determined as the >nal cost of the Cat. However, in the present case, the delay is not aAributable to the pettoners; rather, it is the Board which was the reason for the delay as the Board had handed over possession of the Cats in the year 2018 and, thereaMer, aMer a period of three years, through the impugned order, had sought to collect interest for the amount determined towards the >nal cost. The delay occasioned due to the fault of the Board cannot be mulcted on the pettoners by demanding interest on the said >nal value. Though it is incumbent upon the pettoners, who have purchased the Cats to pay the >nal value as determined by the Board, however, the interminable or a long delay on the part of the Board resultng in charging of interest on the said amount cannot be fastened on the pettoners/purchasers as they were not the reason for the delay. The administratve di=cultes in arriving at the >nal cost which has resulted in the delay in arriving at the >nal cost payable by the respectve purchasers, viz., the pettoners herein, cannot be passed on to the pettoners by claiming interest from them on the said amount, which would be an arbitrary and impermissible exercise. Therefore, the interest claimed on the >nal cost payable by the pettoners in respect of the Cat purchased by them cannot be sustained and the same deserves to be set aside.

¶32For the reasons aforesaid, this writ petton stands disposed of with the following directons :-

i) The impugned order insofar as the fixaton of final cost towards the payment of the flat purchased by the respectve pettoners and its consequental demand is confirmed;

ii) The impugned order insofar as levying of interest on the balance amount payable by the pettoners on determinaton of final cost stands set aside;

iii) The pettoners are directed to pay the final cost as demanded by the Board vide the respectve impugned orders within a period of four weeks from the date of receipt of a copy of this order failing which the said final cost will a!ract interest at 6% p.a. from the date of this order tll the date of payment;

iv) On receipt of the said payment, the Board is directed to execute the sale deed in favour of the respectve pettoners within a period of six weeks therea'er. Consequently, connected miscellaneous pettons are closed. There shall be no order as to costs.

30.03.2026 Index : Yes / No GLN To

¶1The Managing Director Tamil Nadu Housing Board CMDA Complex, E & C Market Road Koyambedu, Chennai 600 107.

¶2The Manager Marketng & Service Besant Nagar Division Tamil Nadu Housing Board Chennai 600 020.

¶3The Chief Engineer (City) Tamil Nadu Housing Board CMDA Complex, E & C Market Road Koyambedu, Chennai 600 107.

¶4The Executve Engineer & Administratve O=cer Tamil Nadu Housing Board Besant Nagar Division Chennai 600 020. W.P.aNos.4465/2024,aetc.,aBatch aaaaaa aaaaaaM.DHANDAPANI,aJ. aaaaa aaaaaGLN a aaaaaaaaaaaaaaaaPRE-DELIVERYaORDERaINa aaaa aaaaaaaaa aaaaaW.P.aNOS.4465aOFa2024,aETC.aBATCH Pronouncedaon aaaaaaaaaaaaaaaaa aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa aaaaaaaaa aaaaa30.03.2026