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The Supreme Court on Friday held that the Patna High Court’s decision in Bihar State Housing Board v Radha Ballabh Health Care and Research Institute quashing the supposedly ‘arbitrary’ updation of price of land allotment is erroneous and not sustainable in law.

The Bench of Justice L Nageswara Rao and Hemant Gupta directed the Health Centre to make payment as per the allotment price fixed by the Housing Board.

Supreme Court has consistently deprecated the practice of allotment of plots dehors an invitation or advertisement by the State or its instrumentalities. An allotment of land without giving any public notice and in absence of a transparent policy and any objective criteria was set aside by the apex court in 2015 in Institute of Law, Chandigarh v Neeraj Sharma. Court however observed that the hospital has been built and is functional and it is too late in the day to cancel the allotment made.

As change in the location of plot was mutually agreed, respondent is estopped in law from disputing the allotment price.

The Bench stated that a tender in response of an advertisement, is only an offer and is not binding unless the other party has communicated acceptance. It thus said, “the respondent does not get any right of allotment of a plot merely because it has applied for allotment earlier.” Consequently, no obligation arises on the other party to make an allotment.

The Court said that the issue of applicable price between the updated cost price and market price was totally irrelevant as it was previously accepted and could not have been challenged in High Court. A price ‘proportionate to the price advertised earlier’ has no legal basis according to the Supreme Court as fixation of price is ‘a commercial decision’ and the Housing Board ‘as a State is required to act fairly’.

Although a delayed payment calls for interest on the principal amount, Court, in the exercise of its inherent powers, desisted from awarding interest on the payment as the same would be against the cause of public health.

–India Legal Bureau

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