Regulatory power cannot rewrite private colony contracts where no statute authorises interference with agreed fees, transfers, or maintenance charges.

The Supreme Court of India held that the Director's powers under the Haryana Development and Regulation of Urban Areas Act, 1975 and Rules, 1976 were limited to regulating licensed development and enforcing statutory obligations, not rewriting private contracts between colonizers and plot buyers. It ruled that the Director had no authority to prohibit extension fee clauses, stop transfers or nomination of transferees before conveyance, or bar separate maintenance charges where such terms arose from the parties' agreement. The impugned directions and the High Court's affirmance were therefore unsustainable, and the regulatory action was ultra vires.

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Issues: (i) whether the Director had power under the Haryana Development and Regulation of Urban Areas Act, 1975 and the Haryana Development and Regulation of Urban Area Rules, 1976 to prohibit collection of extension fee and require deletion of the contractual clause authorising it; (ii) whether the Director could direct discontinuance of transfer of plots after full payment and prevent nomination of transferees before conveyance; (iii) whether the Director had authority to stop collection of maintenance fee and require deletion of the related contractual clause.

Issue (i): whether the Director had power under the Haryana Development and Regulation of Urban Areas Act, 1975 and the Haryana Development and Regulation of Urban Area Rules, 1976 to prohibit collection of extension fee and require deletion of the contractual clause authorising it

Analysis: The Act and Rules structured the Director's role around grant of licence, supervision of layout and development works, and enforcement of statutory obligations connected with internal and external development. They did not confer any power to sit in judgment over the fairness of contractual covenants between colonizer and plot buyer or to alter those covenants. The provision for extension fee arose from a private agreement governing delayed construction, and no statutory provision prohibited such a stipulation or empowered the Director to strike it down.

Conclusion: The direction banning extension fee and directing deletion of the clause was beyond jurisdiction and could not stand.

Issue (ii): whether the Director could direct discontinuance of transfer of plots after full payment and prevent nomination of transferees before conveyance

Analysis: The statutory scheme did not impose any bar on transfer of contractual rights before execution of a conveyance deed. The Registration Act required registration after execution of a conveyance deed, but did not require the deed to be executed within any fixed period after the agreement, nor did the Stamp law or Registration law prohibit assignment of rights under the agreement. The Director therefore had no statutory basis to interfere with nomination or transfer arrangements agreed between the parties.

Conclusion: The direction stopping transfers and restricting nomination was without authority and invalid.

Issue (iii): whether the Director had authority to stop collection of maintenance fee and require deletion of the related contractual clause

Analysis: The obligation under the Act to meet specified development expenses, and to maintain roads, open spaces and public health services for the prescribed period, did not amount to a statutory prohibition against recovering separate maintenance charges for additional services actually rendered. The services for which maintenance fee was collected were not internal development works within the statutory definition, and the Director could not expand that definition to cover such charges. The price and terms of the sale agreement were matters of private contract, not subject to approval or revision by the Director.

Conclusion: The direction prohibiting maintenance fee and requiring refund or deletion of the clause was ultra vires.

Final Conclusion: The statutory powers of the Director were confined to regulation of licensed development and compliance with the Act and Rules, and did not extend to rewriting or invalidating freely entered contractual terms between colonizers and purchasers. The impugned memo and the High Court's affirmance of it were unsustainable.

Ratio Decidendi: A regulatory authority cannot, in the absence of express statutory power, interfere with or amend private contractual terms merely because those terms relate to development of licensed colonies; its powers remain confined to the matters the statute specifically authorises.

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