Delhi High Court
Managing Director, Army Welfare … vs Lt. Col Ranjit Singh (Retd) on 21 May, 2025
Author: Subramonium Prasad
Bench: Subramonium Prasad
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 21st MAY, 2025
IN THE MATTER OF:
+ W.P.(C) 4295/2023 & CM APPL. 16575/2023
MANAGING DIRECTOR, ARMY WELFARE HOUSING
ORGANISATION & ANR. .....Petitioners
Through: Mr. Anand Shankar Jha, Ms.
Meenakshi Devgan, Mr. Abhilekh
Tiwari, Mr. Sachin Mintri, Mr. Parvez
Rahman, Mr. Shubhank Sharma, Hare
Ram Tiwari, Advs.
versus
LT. COL RANJIT SINGH (RETD). .....Respondent
Through: Mr. Rohit Kaushik, Ms. Astha
Sharma, Mr. Sanjeev Kaushik, Mr.
Simranjeet Singh Rekhi, and Ms.
Shriya Mishra, Advocates.
Lt Col Ranjit Singh (retd) in person.
CORAM:
HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD
JUDGMENT
1. The Petitioner has preferred W.P. (C) No.4295/2023 filed under
Article 227 of the Constitution of India against the Final Order and
Judgement dated 01.03.2023 in Review Application No. 48 of 2023, and
Final Order and Judgment dated 15.11.2022 in Revision Petition No.
167/2017 (hereinafter referred as “Impugned Order(s)”) passed by the
National Disputes Consumer Redressal Commission (hereinafter referred as
„NCDRC‟). The NCDRC by the Impugned Order has modified the period of
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delay in construction and handing over of possession as determined by the
State Commission and enhanced the period from 2 years 6 months to 3 years
7 months. The NCDRC even after enhancing the period of delay also
reduced the interest payable by the Petitioners to the Respondent from 15%
to 8%.
2. Shorn of unnecessary details, the facts leading to the filing of the
present Petition are as follows:
a. The Petitioner released an advertisement dated 01.10.2005 for
the Project. The Respondent applied to purchase the houses in
the said Project.
b. Petitioner being the developer of the said Project provided that
the Project will take 3 years to complete, deeming the date of
completion to be in 2008. The Respondent was issued a
booking letter dated 04.12.2007 for the booked dwelling unit in
the Project which specified the tentative date of completion of
the Project to be in December 2010. A revised booking letter
dated 31.12.2010 was again issued to the Respondent.
c. The Petitioner incurred delays and price escalations throughout
the tenure of development of the Project.
d. As per the Petitioner, the price escalation in the Project were
due to the following instances:
i. On 10.02.2005, Haryana Urban Development
Authority (“HUDA”) issued allotment cum demand letter
regarding allotment of 42,492 Sq. meters of land for the
Project. Further, in interest of the Project, the Petitioner
herein requested for some additional land for the Project.
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That vide letter dated 24.10.2005, HUDA allotted
additional land of about 8136 sq. meters to the Petitioners.
ii. The Petitioner was required to install 50 litres solar
water heating system per dwelling unit. Haryana
Renewable Energy Development Agency (hereinafter
referred to as “HAREDA”) issued a letter wherein the
stipulated capacity was increased from 50 to 100 litre per
dwelling unit, which consequently, affected the Project
cost as well as delayed the Project completion.
iii. During the construction, the state government
imposed new taxes resulting in increase of cost. In
December, 2011, HUDA raised a demand of Rs.18.58
Crores towards enhanced compensation of the land from
the Petitioner. Cost towards material, labour, and services
also increased in due course of time which further
increased the Project cost.
e. As per the Petitioner, the incurred delay ensued qua these
instances:
i. Soil investigation was conducted by the Petitioner
which resulted in restructuring and preparation of
foundation de-novo causing substantial delay in
commencement of work and the same also attracted
additional cost of Rs.3.66 Crores. The foundation design
and drawing were revised by the architects and structural
engineers and the same were handed to the contractor for
execution in May, 2008.
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ii. During July-September, 2008, the Project site
received torrential rains which resulted in filling up of the
dug up foundation of the construction site with water.
iii. Pursuant to the order of the Punjab and Haryana
High Court, a ban was imposed on mining in the State of
Haryana since March, 2010 and the ban continued till
2012 which consequentially delayed the progress of work.
iv. As per the agreement dated 18.07.2006 between
HUDA and the Petitioner, it was the duty of HUDA to
ensure supply of power/electricity line till the periphery of
the Petitioners‟ complex. The Petitioners had applied for
sanction of electricity load for the Project, but till
December 2011 the same was not approved by Uttar
Haryana Bijli Vitran Nigam for the reason that the
demanded load can be fed only through a 33 KV/66 KV
system or two independent 11 KV feeders. The Petitioner
was provided with the electricity connection till the
periphery of Project complex only by March 2012 causing
further delay in the Project.
v. The Petitioner was required to install 50 litres solar
water heating system per dwelling unit. HAREDA issued a
letter wherein the stipulated capacity was increased from
50 to 100 litre per dwelling unit, which consequently,
affected the Project cost as well as delayed the Project
completion.
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f. The Respondent filed a Consumer Complaint No. 24/2014
before the District Commission, Panchkula, inter alia, praying
for compensation of Rs.50,000/-, and interest of 10% per
annum for delay in giving possession of the dwelling unit by
the Petitioner.
g. The District Commission vide Order dated 11.07.2014
dismissed the Complaint of the Respondent herein stating that
the delay incurred in the completion of the Project was not in
control of the Petitioner.
h. The Respondent finally took over the possession of his dwelling
unit in the Project on 17.07.2014, as against the proposed
timeline of December 2010. The Respondent paid around
Rs.40,00,000/- to the Petitioner for the purchase of the dwelling
unit.
i. The Respondent filed First Appeal No. 718/2014 in the State
Commission against this Order of the District Commission. The
State Commission passed the Final Order and Judgment dated
09.11.2016, allowing the Appeal, and directed the Petitioner
herein to pay an interest at the rate of 15% per annum for a
period of 2 years and 6 months on the amount deposited by the
Complainant, from the date of respective deposits till the date
of realization.
j. The Petitioner filed a Revision Petition No. 167 of 2017 before
the NCDRC against the Order of State Commission in First
Appeal No. 718/2014. The NCDRC vide Order dated
15.11.2022 dismissed the Revision Petition with a modification
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in the Order of State Commission. The NCDRC reduced the
rate from 15% to 8% per annum on the deposited amount from
the proposed date of possession as per the revised booking
letter, and increased the period of delay from 2 years 6 months
to 3 years 7 months.
k. The Petitioner filed a Review Application No. 48 of 2023
before the NCDRC against its Final Order in Revision Petition
No. 167 of 2017. The NCDRC dismissed the Review
Application finalizing the order of the NCDRC in Review
Petition No. 167 of 2017.
l. The Petitioner has filed the present Writ Petition impugning the
Orders passed in these Revision-Review Petitions.
3. The Petitioners place reliance upon a Judgment dated 06.06.2022
passed by the NCDRC in Major Sandeep Vinayak and Ors. vs. AWHO and
Ors., C.C. No. 221 of 2017 with respect to different set of allottees in the
same Project. The NCDRC in the said Judgment had come to a conclusion
that there is no delay in construction. The NCDRC in the said case was of
the opinion that the delay has been fully explained and was because of
situations far beyond the control of the Petitioner. The relevant extract of
the judgment is as under:-
“9. I have considered the arguments of the counsel for
the parties and examined the record. Supreme Court in
Banglore Development Authority Vs. Syndicate Bank,
(2007) 6 SCC 711, has held in the matter of civil
construction the time is not the essence of contract. In
the present case, Clause 10 of booking letter dated
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end of the year 2010. In the written reply, it has been
stated that Occupation Certificate was obtained on
13.08.2013. Thereafter possession was started to be
given to the complainant from August, 2013 to
September, 2014. So far as delay in construction is
concerned, it has been stated that HUDA took 17
months in granting of permission, which was granted
on 04.04.2007. Thereafter layout plan was sanctioned
and construction was started on 22.10.2007 on the
spot. Although the project was vetted by Indian
Institute Technology Delhi, but upon the commencing
of the work of laying down foundation number of loose
boulders were encountered at the site, due to its
proximity with river bed of river Ghaggar. Then in the
interest of structural stability, AWHO Commissioned
fresh soil investigation reports from various experts
such as M/s. Ghuman and Gupta Geotec Consultant.
All the experts in their opinion had advised for raft
foundation instead of ‘isolated footing foundation’ then
the design and drawing got changed and fresh
approval was obtained from the concerned authorities.
Thereafter, the construction was stopped due to heavy
rain in June 2008 to August 2008. Due to these
reasons, the construction was delayed for ten months.
There was mining ban imposed by High Court of
Panjab and Haryana from 01.03.2010 till May, 2012.
Thus, two years two months construction was affected
due to shortage of sand, stones and grids etc. Due date
of possession, in the present cases where December,
2010 while possession were given since August 2013.
Delay was about two years seven months, which has
been fully explained above. This Commission in
Revision Petition No.1982 of 2014, Lt. Col. Ajmer
Singh (Retd.) Vs. Adjutant General and other
connected revisions decided on 16.02.2015 accepted
explanation for delay of two years six months.
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10. None of the complainants have raised any
objection relating to delayed compensation at the time
of taking possession, therefore, they cannot be allowed
to raise objection in this respect after such a long time.
In such circumstances, I do not find that the
complainants are entitled for delayed compensation.
AWHO is working on ‘no profit no loss’ basis and is not
a profit making organization. It has realized the
amount of increased costs from the complainants time
to time, which were factored due to (i) society corpus
charges, (ii) floor differential charges, (iii) parking
charges, (iv) enhanced land compensation, (v)
imposition of service tax and labour welfare cess since
2010, (vi) price rise of building materials, (vii) change
in norms of Haryana Renewable Energy Development
Agency.”
4. The aforesaid Judgment was challenged before the Apex Court in
Major Sandeep Vinayak and Ors. vs. AWHO and Ors., Civil Appeal
bearing No.8251/2022. The Apex Court vide Order dated 12.12.2022,
disposed of the said appeal by passing the following Order:-
“Delay Condoned.
The present appeals relate to 140 original
complainants who had approached the National
Consumer Disputes Redressal Commission, New
Delhi.
Having heard Shri Gaurav Agarwal and Shri
Sunil Fernandes, learned counsel appearing on behalf
of the appellants/original complainants and Shri
Tushar Mehta, learned Solicitor General of India
appearing on behalf of the respondents and in the
peculiar facts and circumstances of the case and to
have quietus, we modify the impugned common
judgment and order dated 06.06.2022 passed inSignature Not Verified
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Consumer Case No.221/2017 and direct that the
appellants be paid a sum of Rs.2,00,000/- each by the
respondents towards lump sum compensation for the
delay in handing over the possession, to be paid,
within a period of eight weeks from today.
It is made clear that the present order is passed
in the peculiar facts and circumstances of the case and
the same may not be cited as precedent.
The Appeals stand disposed of in terms of the
above accordingly. No costs.”
5. The NCDRC vide a Judgment dated 16.02.2015 in Lt. Col. Ajmer
Singh (Retd) v. Adjutant General & Ors., Revision Petition No.1982 of
2014, while dealing with similar facts in respect of different set of allottees
in the same Project, has held as under:-
“26. In the result, we find that the action of the OPs is
below the belt to some extent. The booking letter dated
11.08.2006 issued in favour of the complainants
indicating that proposed date of completion is three
years‟, subject to acceptance of the tenders as the
Tender is again, yet to commence. The possession was
given to the complainants in July, 2013. There is total
delay of seven years. Out of these three years, the
prescribed period, plus two years‟ of mining ban, stand
adjusted. There is delay of two years only, out of which,
we give grace period of six months. The OPs are guilty
of constructing the flats by a period of one-and-a-half
years‟. The people are exasperated by unnecessary
delays. Due to delay, the complainants also, could not
get the rebate detailed above.
27. However, before giving our final say, it is pertinent
to mention here that the Revision Petition Nos.
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2206/2014, 2207/2014, 2208/2014, 2209/2014,
2210/2014, 2211/2014, and 2212/2014 have been filed
with a delay of 2 days‟ each, for which applications for
condonation of delay have been filed. For the reasons
stated in the applications for condonation of delay, the
said delay is hereby condoned.
28. Keeping in view the facts and circumstances stated
above, we partly allow the revision petitions, filed by
the complainants and set aside the order of the State
Commission. The complainants are granted interest @
15% p.a., for a period of one-and-a-half years‟ on the
amounts deposited by them, from the date(s) of
respective deposit(s), payable by the OPs, within a
period of 90 days‟ from the date of receipt of copy of
this order, otherwise, after the expiry of said 90 days,
the rate of interest shall stand enhanced to 18% p.a.,
w.e.f. expiry of above said 90 days‟, till its realization.”
6. The Petitioner herein moved to the Apex Court against the Order
dated 16.02.2015 passed by the NCDRC by filing an SLP titled as AWHO
through its Managing Director vs. Lt. Col. Ajmer Singh (Retd) and Ors.,
SLP (C) Nos. 15118-15122/2015. The Apex Court in its Order dated
31.03.2016 held in favour of the allottees and declined to interfere with the
orders passed by the NCDRC granting compensation. The same reads as
under:-
“We have heard Shri Guru Krishna Kumar, learned
senior counsel appearing for the petitioner, who has
taken us through the order(s) impugned and other
relevant documents.
We see no reason, much less, any compelling reason to
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under Section 136 of the Constitution. The special
leave petitions are accordingly dismissed.
We, however, extend the time fixed by the National
Commission by another two months from today for
grant of refunds/adjustments towards interest
with the observation that in case the needful is not
done within the extended time, the direction issued by
the National Commission regarding enhanced rate of
interest would take effect. All pending applications
shall also stand disposed of in the above terms.”
7. The Counsel for the Petitioner states that the dismissal of the SLP
against the Judgment dated 16.02.2015 of the NCDRC in Lt. Col. Ajmer
Singh (supra) only indicates that the Apex Court was not inclined to
interfere with the aforementioned Judgment dated 16.02.2015 under Article
136 of the Constitution of India but in the case of Major Sandeep Vinayak
(supra), the order passed by the Apex Court is in a civil appeal. He states
that the judgment in Major Sandeep Vinayak (supra) was binding on the
NCDRC under Article 141 of the Constitution of India. It is, therefore,
contended that the NCDRC ought to have followed the later decision in
Major Sandeep Vinayak (supra). He further states that there cannot be two
sets of cases wherein, in one set the compensation is fixed at Rs.2 lakhs for
each allottee of a dwelling unit, whereas the other set of allottees, have been
awarded 8% interest on the deposited amount towards the delayed allotment.
He states that in order to bring consistency, the NCDRC could have at best
only awarded Rs.2 lakhs as compensation under Article 141 of the
Constitution of India.
8. The learned Counsel for the Petitioner submits that a bare perusal of
the various Orders passed by the NCDRC, as well as, the Apex Court, with
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respect to the same Project would demonstrate that the Impugned Order
passed by the NCDRC has created an anomaly for the Petitioner and as such
the Impugned Order deserves to be quashed and set aside.
9. Learned Counsel for the Petitioner also states that the Petitioner
organization is a „no profit no loss‟ society working to provide affordable
housing to army personnel, retired officers, war widows, and battle
causalities of the Indian Army. The rigors of Consumer Protection Act, 1986,
cannot be made applicable to the Petitioners‟ Organization as, unlike
commercial builders and real estate companies, the AWHO does not
generate any surplus or profit from the services rendered by them.
10. Per contra, the learned counsel for the Respondent states that the
present Writ Petition is not maintainable against the Order passed by the
NCDRC and the only remedy available to the Petitioner was to approach the
Apex Court by filing an appeal under Article 136 of the Constitution of India
as NCDRC is a Court in itself and a writ petition cannot lie against the
decision of a Court.
11. The Counsel for the Respondent further submits that the Apex Court
in AWHO through its Managing Director (supra) held in favor of the
allottees and had declined to interfere with the orders passed by the NCDRC
granting compensation. He states that the Petitioner also filed a review
against the above-mentioned judgment of the Apex Court which was
dismissed by the Apex Court finalizing the decree in favour of the allottees.
The NCDRC in the Impugned Order passed a similar decree and the same
should not be interfered by this Court.
12. He also contends that the judgment in Major Sandeep Vinayak (supra)
cannot be termed as law under Article 141 of the Constitution of India. He
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states that only the ratio of a judgment passed by the Apex Court is binding
under Article 141 of the Constitution of India and not the whole order. He
further places reliance on various judgments passed by the Apex Court to
substantiate his contention. He states that the Order has been passed by the
Apex Court under Article 142 of the Constitution of India and states that it
cannot be treated as a precedent.
13. Heard the Counsels for both sides and perused the material available
on record.
14. The issue as to whether the present Petitions are maintainable or not is
no longer res integra as it is covered by the Judgment of the Apex Court in
Universal Sompo General Insurance Company Limited v. Suresh Chand Jain
and Another, (2024) 9 SCC 148, wherein the Apex Court after considering
the various decisions, has observed as under:
“39. In the aforesaid view of the matter, we have
reached to the conclusion that we should not
adjudicate this petition on merits. We must ask the
petitioner herein to first go before the jurisdictional
High Court either by way of a writ application under
Article 226 of the Constitution or by invoking the
supervisory jurisdiction of the jurisdictional High
Court under Article 227 of the Constitution. Of course,
after the High Court adjudicates and passes a final
order, it is always open for either of the parties to
thereafter come before this Court by filing special
leave petition, seeking leave to appeal under Article
136 of the Constitution.”
15. After holding that the instant Petition is maintainable, this Court is of
the opinion that though the present Petitions are styled as one under Article
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226 of the Constitution of India, they actually fall under Article 227 of the
Constitution of India.
16. Learned Counsel for the Petitioner has only pointed out the
differences in the findings by the State Commission regarding the delay in
handing over the possession. Learned Counsel for the Petitioner is right in
contending that the delay ranges from around 1 year to 3 years. In Col.
Ajmer Singh (supra) the NCDRC was of the opinion that there was a delay
of 7 years in handing over the possession out of which 5 years and 6 months
were deducted. Whereas, in the instant case, the finding of facts by the
Forum below indicates that there was an effective delay of about 3 years 7
months.
17. In any event, the facts of the case reveal that there has been delay in
construction and handing over of the dwelling units. The scope of
interference while exercising jurisdiction under Article 227 of the
Constitution of India is well settled. The power of the High Court for
exercising jurisdiction under Article 227 of the Constitution of India has
been succinctly explained by the Apex Court in Estralla Rubber v. Dass
Estate Private Limited, 2001 (8) SCC 97, wherein the Apex Court has
observed as under:-
“6. The scope and ambit of exercise of power and
jurisdiction by a High Court under Article 227 of the
Constitution of India is examined and explained in a
number of decisions of this Court. The exercise of
power under this article involves a duty on the High
Court to keep inferior courts and tribunals within the
bounds of their authority and to see that they do the
duty expected or required of them in a legal manner.
The High Court is not vested with any unlimited
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decisions made within the limits of the jurisdiction of
the subordinate courts or tribunals. Exercise of this
power and interfering with the orders of the courts or
tribunals is restricted to cases of serious dereliction of
duty and flagrant violation of fundamental principles
of law or justice, where if the High Court does not
interfere, a grave injustice remains uncorrected. It is
also well settled that the High Court while acting
under this article cannot exercise its power as an
appellate court or substitute its own judgment in
place of that of the subordinate court to correct an
error, which is not apparent on the face of the record.
The High Court can set aside or ignore the findings
of facts of an inferior court or tribunal, if there is no
evidence at all to justify or the finding is so perverse,
that no reasonable person can possibly come to such
a conclusion, which the court or tribunal has come
to.
7. This Court in Ahmedabad Mfg. & Calico Ptg. Co.
Ltd. v. Ram Tahel Ramnand [(1972) 1 SCC 898 : AIR
1972 SC 1598] in AIR para 12 has stated that the
power under Article 227 of the Constitution is intended
to be used sparingly and only in appropriate cases, for
the purpose of keeping the subordinate courts and
tribunals within the bounds of their authority and, not
for correcting mere errors. Reference also has been
made in this regard to the case Waryam Singh v.
Amarnath [AIR 1954 SC 215 : 1954 SCR 565] . This
Court in Bathutmal Raichand Oswal v. Laxmibai R.
Tarte [(1975) 1 SCC 858 : AIR 1975 SC 1297] has
observed that the power of superintendence under
Article 227 cannot be invoked to correct an error of
fact which only a superior court can do in exercise of
its statutory power as a court of appeal and that the
High Court in exercising its jurisdiction under Article
227 cannot convert itself into a court of appeal when
the legislature has not conferred a right of appeal.
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Judged by these pronounced principles, the High Court
clearly exceeded its jurisdiction under Article 227 in
passing the impugned order.”
(emphasis supplied)
18. The scope of interference under Article 226 & 227 of the Constitution
of India when considering the decision of the subordinate Court which falls
within the jurisdiction of that Court is narrow. The Courts do not go into the
excruciating details of the facts and come to a different conclusion to the one
arrived at by the subordinate court even if there can be a different
conclusion. The Court only interferes if the subordinate Court has proceeded
without there being any evidence or, the findings of the lower Court are so
perverse that no Court could have come to that finding.
19. After having perused the judgment of the NCDRC and the State
Commission it cannot be said that the findings of the NCDRC are so
perverse that it warrants interference by this Court. This Court is, therefore,
not inclined to interfere with the finding that there has been delay in handing
over the possession of the dwelling units.
20. The question which is now left to be considered by this Court is as to
whether the NCDRC ought to have followed the Apex Court in Major
Sandeep Vinayak (supra) by directing the Petitioner herein to pay Rs.2 lakhs
uniformly to each of the Respondents herein or whether the NCDRC was
justified in going into the facts of the case and upholding the findings of the
State Commission wherein it has been held that there was delay in handing
over the dwelling units, entitling the allottees compensation for deficiency in
service and inordinate delay in handing over the units and awarding
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compensation to the Respondents by directing to pay interest at 8% p.a. on
the delay period.
21. To answer this question, it is necessary to analyze as to whether the
Judgment of the Apex Court in Major Sandeep Vinayak (supra) which has
been passed by the Apex Court while exercising its jurisdiction under Article
142 of the Constitution of India is law under Article 141 of the Constitution
of India or not.
22. Article 141 of the Constitution of India states that the law declared by
the Apex Court is binding on all Courts within the territory of India. Article
141 of the Constitution of India reads as under:
“141. Law declared by Supreme Court to be binding
on all courts.–The law declared by the Supreme Court
shall be binding on all courts within the territory of
India.”
23. Article 142 of the Constitution of India, on the other hand gives
power to the Apex Court in the exercise of its jurisdiction to pass any such
decree or make such order as is necessary for doing complete justice in any
case or matter pending before it.
24. It is well settled that what is binding on the Courts is the ratio of a
judgment. While explaining as to what is a binding precedent, Justice A. P.
Sen in the case of Dalbir Singh v. State of Punjab, (1979) 3 SCC 745 has
observed as under:
“22. … According to the well-settled theory of
precedents every decision contains three basic
ingredients:
„(i) findings of material facts, direct and inferential. An
inferential finding of facts is the inference which the
Judge draws from the direct or perceptible facts;
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(ii) statements of the principles of law applicable to the
legal problems disclosed by the facts; and
(iii) judgment based on the combined effect of (i) and
(ii) above.‟
For the purposes of the parties themselves and their
privies, ingredient (iii) is the material element in the
decision for it determines finally their rights and
liabilities in relation to the subject-matter of the action.
It is the judgment that estops the parties from
reopening the dispute. However, for the purpose of the
doctrine of precedents, ingredient (ii) is the vital
element in the decision. This indeed is the ratio
decidendi. [R.J. Walker & M.G. Walker : The English
Legal System. Butterworths, 1972, 3rd Edn., pp. 123-
24.] It is not everything said by a Judge when giving
judgment that constitutes a precedent. The only thing
in a Judge’s decision binding a party is the principle
upon which the case is decided and for this reason it is
important to analyse a decision and isolate from it the
ratio decidendi. In the leading case of Qualcast
(Wolverhampton) Ltd. v. Haynes [Qualcast
(Wolverhampton) Ltd. v. Haynes, 1959 AC 743 :
(1959) 2 WLR 510 : (1959) 2 All ER 38 (HL)] it was
laid down that the ratio decidendi may be defined as a
statement of law applied to the legal problems raised
by the facts as found, upon which the decision is based.
The other two elements in the decision are not
precedents. The judgment is not binding (except
directly on the parties themselves), nor are the findings
of facts. This means that even where the direct facts of
an earlier case appear to be identical to those of the
case before the court, the Judge is not bound to draw
the same inference as drawn in the earlier case.”
25. In the same vein, in Secunderabad Club v. Commissioner of Income
Tax, 2023 SCC OnLine SC 1004, the Apex Court has held as under:-
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“13. It is a settled position of law that only the ratio
decidendi of a judgment is binding as a precedent. In
B. Shama Rao v. Union Territory of Pondicherry,
AIR 1967 SC 1480*, it has been observed that a
decision is binding not because of its conclusion but
with regard to its ratio and the principle laid down
therein. In this context, reference could also be made
to Quinn v. Leathem [1901] AC 495 (HL), wherein it
was observed that every judgment must be read as
applicable to the particular facts proved, or assumed
to be proved, since the generality of the expressions
which may be found there are not intended to be
expositions of the whole law, but governed and
qualified by the particular facts of the case in which
such expressions are found. In other words, a case is
only an authority for what it actually decides.
xxx
15. In the leading case of Qualcast (Wolverhampton)
Ltd. v. Haynes [1959] AC 743, it was laid down that
the ratio decidendi may be defined as a statement of
law applied to the legal problems raised by the facts as
found, upon which the decision is based. The other two
elements in the decision are not precedents. A
judgment is not binding (except directly on the parties
to the lis themselves), nor are the findings of fact. This
means that even where the direct facts of an earlier
case appear to be identical to those of the case before
the court, the judge is not bound to draw the same
inference as drawn in the earlier case.
16. The legal principles guiding the decision in a case
is the basis for a binding precedent for a subsequent
case, apart from being a decision which binds the
parties to the case. Thus, the principle underlying the
decision would be binding as a precedent for a
subsequent case. Therefore, while applying a decision
to a later case, the court dealing with it has to carefully
ascertain the principle laid down in the previousSignature Not Verified
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decision. A decision in a case takes its flavour from the
facts of the case and the question of law involved and
decided. However, a decision which is not express and
is neither founded on any reason nor proceeds on a
consideration of the issue cannot be deemed to be law
declared, so as to have a binding effect as is
contemplated under article 141, vide State of Uttar
Pradesh v. Synthetics and Chemicals Ltd. (1991) 4
SCC 139*. Article 141 of the Constitution states that
the law declared by the Supreme Court shall be
binding on all the courts within the territory of India.
All courts in India, therefore, are bound to follow the
decisions of Supreme Court. This principle is an aspect
of judicial discipline.
17. If a decision is on the basis of reasons stated in the
decision or judgment, only the ratio decidendi is
binding. The ratio or the basis of reasons and
principles underlying a decision is distinct from the
ultimate relief granted or manner of disposal adopted
in a given case. It is the ratio decidendi which forms a
precedent and not the final order in the judgment,
vide Sanjay Singh v. Uttar Pradesh Public Service
Commission (2007) 3 SCC 720. Therefore, the decision
applicable only to the facts of the case cannot be
treated as a binding precedent.
18. The doctrine of binding precedent helps in
promoting certainty and consistency in judicial
decisions and enables an organic development of the
law besides providing assurance to individuals as to
the consequences of transactions forming part of daily
affairs. Thus, what is binding in terms of article 141 of
the Constitution is the ratio of the judgment and as
already noted, the ratio decidendi of a judgment is the
reason assigned in support of the conclusion. The
reasoning of a judgment can be discerned only upon
reading of a judgment in its entirety and the same has
to be culled out thereafter. The ratio of the case has toSignature Not Verified
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be deduced from the facts involved in the case and the
particular provision(s) of law which the court has
applied or interpreted and the decision has to be read
in the context of the particular statutory provisions
involved in the matter. Thus, an order made merely to
dispose of the case cannot have the value or effect of
a binding precedent.
*****
24. In view of the aforesaid discussion, we think that
we cannot accept the argument advanced by learned
senior counsel, Sri Datar, for the following reasons :
firstly, the order in Cawnpore Club is not on the basis
of any reasoning or a deduction made as to whether
on the interest earned on fixed deposits made by a
club in a bank, Income-tax would be attracted or not.
In the absence of any deduction or reasoning or
analysis, the said order cannot carry precedential
value so as to be binding on this court in a
subsequent case. This is because there is no
discernible ratio decidendi in the said order. Of
course, the said order would bind the parties to the
case. While carefully reading the order passed by this
court in Cawnpore Club, it can be discerned that the
High Court had clearly spelt out that in the case of
income earned from letting out of rooms/property to
its members, the same would not be subjected to tax.
On the aforesaid aspect, the Revenue had not filed
any appeal before this court, and therefore, on that
aspect the matter should conclude in favour of the
assessee therein, i. e., Cawnpore Club. Secondly,
without going into the other aspects of the case, this
court simply noted that the assessee therein
(Cawnpore Club) could not be taxed on the principle
of mutuality, therefore, it would not serve any
purpose to proceed with the appeals on the other
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assigned as to on what aspect or activities of the said
club and its transactions the principle of mutuality
would apply. In the absence of there being any clear
indication in the discussion or analysis and there
being a simple closure of a case, it would clearly
imply that the doctrine of mutuality would apply only
to those activities to which it would normally apply.
That is different from saying that even in the case of
income earned by a club from non-members or
income earned from investment made by a club in
fixed deposits in a bank would attract the principle of
mutuality and therefore, no tax is payable. Thirdly, if
an order of this court is brief and meant only for the
purpose of closure of the controversy involved in a
particular case and with a view to conclude the case,
undoubtedly, such an order is binding on the parties
to the said order, but in our view, it cannot act as a
precedent for subsequent cases such as the present
one with which we are dealing.”
(Emphasis supplied)
26. On the other hand, on the issue as to whether an order of the Apex
Court passed under Article 142 of the Constitution of India is a precedent or
not, the Apex Court in State of Punjab & Ors. v. Rafiq Masih
(Whitewasher), (2014) 8 SCC 883, has held as under:-
“12. Article 142 of the Constitution of India is
supplementary in nature and cannot supplant the
substantive provisions, though they are not limited by
the substantive provisions in the statute. It is a power
that gives preference to equity over law. It is a justice-
oriented approach as against the strict rigours of the
law. The directions issued by the Court can normally
be categorised into one, in the nature of moulding of
relief and the other, as the declaration of law.
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implied by the highest court of the land. This Court in
Indian Bank v. ABS Marine Products (P) Ltd. [(2006)
5 SCC 72] , Ram Pravesh Singh v. State of Bihar
[(2006) 8 SCC 381 : 2006 SCC (L&S) 1986] and in
State of U.P. v. Neeraj Awasthi [(2006) 1 SCC 667 :
2006 SCC (L&S) 190] has expounded the principle
and extolled the power of Article 142 of the
Constitution of India to new heights by laying down
that the directions issued under Article 142 do not
constitute a binding precedent unlike Article 141 of the
Constitution of India. They are direction issued to do
proper justice and exercise of such power, cannot be
considered as law laid down by the Supreme Court
under Article 141 of the Constitution of India. The
Court has compartmentalised and differentiated the
relief in the operative portion of the judgment by
exercise of powers under Article 142 of the
Constitution as against the law declared. The
directions of the Court under Article 142 of the
Constitution, while moulding the relief, that relax the
application of law or exempt the case in hand from the
rigour of the law in view of the peculiar facts and
circumstances do not comprise the ratio decidendi and
therefore lose its basic premise of making it a binding
precedent. This Court on the qui vive has expanded the
horizons of Article 142 of the Constitution by keeping it
outside the purview of Article 141 of the Constitution
and by declaring it a direction of the Court that
changes its complexion with the peculiarity in the facts
and circumstances of the case.
27. In Indian Bank v. ABS Marine Products (P) Ltd, (2006) 5 SCC 72,
the Apex Court has held as under;-
“26. One word before parting. Many a time, after
declaring the law, this Court in the operative part of
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from the rigour of the law in view of the peculiar facts
or in view of the uncertainty of law till then, to do
complete justice. While doing so, normally it is not
stated that such direction/order is in exercise of
power under Article 142. It is not uncommon to find
that courts have followed not the law declared, but
the exemption/relaxation made while moulding the
relief in exercise of power under Article 142. When
the High Courts repeatedly follow a direction issued
under Article 142, by treating it as the law declared by
this Court, incongruously the exemption/relaxation
granted under Article 142 becomes the law, though at
variance with the law declared by this Court. The
courts should therefore be careful to ascertain and
follow the ratio decidendi, and not the relief given on
the special facts, exercising power under Article 142.
One solution to avoid such a situation is for this Court
to clarify that a particular direction or portion of the
order is in exercise of power under Article 142. Be that
as it may.” (Emphasis supplied)
28. The Apex Court in Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197
has observed as under:
“30. It is well settled that a judgment is a precedent
for the issue of law which is raised and decided. It is
the ratio decidendi of the case which operates as a
binding precedent. As observed by this Court in State
of Punjab v. Surinder Kumar [State of
Punjab v. Surinder Kumar, (1992) 1 SCC 489 : 1992
SCC (L&S) 345] , what is binding on all courts is what
the Supreme Court says under Article 141 of the
Constitution, which is declaration of the law and not
what it does under Article 142 to do complete justice.
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29. A perusal of the aforesaid judgments passed under Article 141 & 142
of the Constitution of India shows that a judgment rendered by the Apex
Court is not binding in its entirety. It is only the ratio decidendi part of the
judgment which is binding and shall be taken into consideration while
deciding questions of law based on identical issues and facts. A consent
order, obiter dicta, per-incuriam judgment and sub silentio order are some
of the exceptions to this doctrine of law of precedents.
30. In view of the law laid down by the Apex Court, the Judgment in
Major Sandeep Vinayak (supra) is not law under Article 141 of the
Constitution of India in the absence of ratio for its findings. On the other
hand, the Apex Court has dismissed the SLP against the judgment of Lt. Col.
Ajmer Singh (supra) which indicates that the Apex Court has only decided
not to interfere with the judgment of NCDRC in exercise of its jurisdiction
under Article 136 of the Constitution of India. Viewed in this manner, this
Court does not find any infirmity in the decision of the NCDRC in following
its earlier judgment rendered in Lt. Col. Ajmer Singh (supra). This Court is
of the opinion that there is no conflict in the two orders of the Apex Court.
The dismissal of SLP in AWHO through its Managing Director (supra) is
not on merits and at the same time the decision in Major Sandeep Vinayak
(supra) is on the facts of that case as stated above and not a binding
precedent. The NCDRC was therefore justified in proceeding with the case
in its own merits.
31. The State Commission and the NCDRC have unanimously held that
there is a delay in handing over the possession of the dwelling unit. It is well
settled that each case is decided on the strength of the facts as placed before
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the Court, the evidence placed before the court, and the appreciation of
evidence by the Courts.
32. On perusal of the Order of NCDRC‟s in Lt. Col. Ajmer Singh (supra),
it is found that the allottees were given possession of the dwelling unit in
July, 2013. However, in the present case the Respondent was given the
possession of the dwelling unit on 17.07.2014.
33. The NCDRC in the Impugned Order followed the directives of Lt.
Col. Ajmer Singh (supra). The NCDRC in Lt. Col. Ajmer Singh (supra) has
explained the rationale behind the computation of the delay period. The
relevant extract is as follows:-
“26. In the result, we find that the action of the OPs is
below the belt to some extent. The booking letter dated
11.08.2006 issued in favour of the complainants
indicating that proposed date of completion is three
years‟, subject to acceptance of the tenders as the
Tender is again, yet to commence. The possession was
given to the complainants in July, 2013. There is total
delay of seven years. Out of these three years, the
prescribed period, plus two years‟ of mining ban, stand
adjusted. There is delay of two years only, out of which,
we give grace period of six months. The OPs are guilty
of constructing the flats by a period of one-and-a-half
years‟. The people are exasperated by unnecessary
delays. Due to delay, the complainants also, could not
get the rebate detailed above.”
In the aforesaid Judgment, the NCDRC calculated the delay from the date of
issuance of the booking letter to the allottee, till the date of hand-over of the
possession of the dwelling unit. The said period amounts to 7 years. Out of
the 7 years, the following were deducted: –
i. 3 years for the proposed period of completion,
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ii. 2 years of mining ban,
iii. 6 months of discretionary grace period.
34. However, in the present matter, the booking letter was issued on
04.12.2007, and the possession was given to the allottee on 17.07.2014.
Following the rationale of Lt. Col. Ajmer Singh (supra), there is a delay of 6
years 7 months out of which 5 years 6 months are to be deducted. However,
this Court while exercising its jurisdiction under Article 227 is not inclined
to interfere with the compensation as awarded by the NCDRC.
35. This Court dismisses this Petition being devoid of any merit. The
Petitioner is directed to pay delay compensation of 8% p.a. to the
Respondent(s) as per the terms dictated in the Impugned Order.
SUBRAMONIUM PRASAD, J
MAY 21, 2025
hsk/mt
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