Competent Authority Under MHADA Act Has Jurisdiction To Adjudicate Legality Of Amounts Lawfully Due From Allottees

The Petitioner (the Board) is a statutory housing body that allotted a suit flat to the Respondent in 1993 under a 2% Government special quota

The flat had been constructed in 1987, but the final price was not fixed at the time of delivery of possession.

In 1995, the Board demanded Rs. 5,51,000, which included interest capitalization and escalation costs from 1987 to 1995

Upon non-payment, the Competent Authority initiated eviction proceedings under Section 66 of the MHAD Act, 1976.

The Competent Authority reduced the "lawfully due" amount to Rs. 2,56,405.57, holding that the Board could not charge interest for the period prior to allotment

The Respondent paid this reduced amount, and the Appellate Authority subsequently set aside the eviction order. The Board challenged these orders via Writ Petition, arguing that the authorities lacked jurisdiction to revise prices fixed by the Board

1. Whether the Competent Authority and Appellate Authority under Chapter VI of the MHAD Act have the jurisdiction to adjudicate upon and determine the correctness of the "amount lawfully due" claimed by the Board.

2. Whether the Board is legally entitled to increase the price of a tenement through interest capitalization and escalation charges for the period between construction (1987) and actual allotment (1993).

Section 66(1)(a)(i) empowers the Competent Authority to evict an occupant for non-payment of "amount lawfully due"

Section 69 vests the Authority with powers of a Civil Court for inquiries

Section 71 bars the jurisdiction of Civil Courts in these matters

Regulation Nos. 15 and 22 of the MHAD (Estate Management, Sale, Transfer and Exchange of Tenements) Regulations, 1981, authorize the Board to vary or revise prices to account for time elapsed and supervision/construction expenditure, overriding prior agreements

The Court rejected the Petitioner’s argument that the Competent Authority has no power to scrutinize the quantum of dues. It reasoned that since the jurisdiction of Civil Courts is barred under Section 71, an interpretation denying the Authority the power to determine what is "lawfully due" would leave allottees with no remedy against arbitrary demands

However, the Court found the lower authorities erred in striking down the interest capitalization for the 1987–1993 period. It held that under Regulations 15 and 22, the Board is entitled to recover "incidental expenses" and cost escalations, especially given the six-year gap between construction and allotment in a high-value area like Kothrud, Pune

The Court observed that the Respondent, as a former President of the Board, could not plead ignorance of these statutory payment obligations

While the Board was entitled to the 1987–1993 interest, the Court limited subsequent interest to 9% p.a. from 1995 onwards

The Respondent was directed to pay a remaining balance of Rs. 3,42,047 (recalculating the principal and 9% interest) within two weeks, failing which the Petitioner may proceed with eviction