G.S. Kashyap & Sons And Ors. vs Director Of Industries And Ors.
1988 Latest Caselaw 97 Del

JUDGMENT

S.S. Chadha, Acting C.J.

(1) This petition under Article 228 of the Constitution of India seeks a writ of certiorari or other appropriate writ, order or direction quashing the order dated December 19, 1985 and appellate order dated September 1, 1986 determining the lease of land bearing No. 238 in the lay-out plan of Okhla Industrial Estate, Phase Iii, measuring 2444 sq.yds. leased out to M/s. G.S. Kashyap & Sons by virtue of the perpetual lease-deed dated June 25, 1971.

(2) The petitioners are having a factory in a non-conforming area according to the Master Plan of Delhi. Applications were invited by the Directorate of industries for an industrial plot in the Okhia Industrial Estate, Phase Iii, New Delhi available for allotment to industrial entrepreneurs of Delhi in the small scale industries and who were interested in shifting their industries from non-conforming area to a conforming area. In pursuance of the application made by the petitioners, they were allotted tentatively a plot in the Okhia Industrial Estate, Phase III. The allotment of a plot in Okhla Industrial Estate, Phase Iii was confirmed in the letter dated November 7, 1969 in respect of plot No. 238, measuring 2444 sq yds. approximately. The petitioners were called upon to pay the premium as indicated in that letter. Subsequently, a lease-deed was executed on June 25, 1971. There were some proceedings about the cancellation of allotment and re-entry and the withdrawal of re-entry which need not detain us. By letter dated April 22, 1976 the cancellation of the allotment in favor of the petitioners was withdrawn and they were asked to complete the construction latest by August 30, 1976. In the meantime, the Urban Land (Ceiling and Regulation) Act, 1976 was enacted and enforced. The petitioners were allowed to construct the factory building on the aforesaid plot within one year from the date the exemption under the Urban Land (Ceiling & Regulation) Act, 1976 was received by them. The ceiling under the provisions of the said Act was ultimately removed and exemption granted on August 30, 1980 The petitioners however, after a lapse of about three years, made an application dated June II. 1983 for the grant of sanction to erect the building on the aforesaid plot. The sanction was granted by the Development Authority under Section 12 of the Delhi Development Act by letter dated August 22, 1983.

(3) The respondents by show cause notice dated February 14, 1985 called upon the petitioners to show cause as to why the lease be not cancelled for violation of sub-clause ll(4)(a) of the lease-deed. It was mentioned that the period for construction had lapsed on August 29, 1984 but the lessee bad failed to complete the construction of the building and thus committed breach of covenants and conditions of the said lease deed.

(4) The petitioners after the receipt of the show cause notice, addressed a letter dated March 5, 1985 (Annexure 'M' to the writ petition). In that letter, the petitioners requested for extension of time to build the factory up to December 31, 1986 on various grounds mentioned in the said letter. It was also stated "We are not sure about the composition charges to be levied for granting extension up to December 31,1986. We are, therefore, enclosing herewith cheque No. 110039 dated 5.3.1985 for Rs. 18,000.00 towards composition charges. If any further amount is required, we will willingly pay the same". By final notice dated April 17, 1985, the petitioners were called upon to deposit the lease money/ground rent amounting to Rs. 22,984.50 and also Rs. 18,000.00 towards the composition charges. It is the 'common case that the amount of Rs. 22,984.50 was deposited by the petitioners with the respondents vide challan No. 1881 dated April 28, 1985 and Rs 18,COP.00 paid vide challan No. 1965 dated April 26, 1985 as the cheques earlier submitted by the petitioners were dishonoured on presentation.

(5) The impugned order dated December 19, 1985 passed by the Deputy Secretary (Industries) makes a reference to the show cause notice dated February 14. 1985 as also the explanation dated March 5, 1985 submitted by the petitioners. It is opined that the explanation was found unsatisfactory. The appeal of the petitioners was considered by the Competent Authority and was rejected. The letter communicating the rejection is dated September 17, 1986 but gives no reasons for the rejected.

(6) When Rule Nisi was issued in this case on November 18, 1986, this court recorded the offer of the petitioners that they are willing to give an undertaking that they would construct the building within two years and shift the industry from the non-conforming area on completion of the building on the plot in dispute Respondents I to 3 were restrained from re-entering upon or re-possessing the plot in dispute. Mr. Bhasin who appeared in the case was asked to obtain instructions from the respondents to the aforesaid offer. Later on Mr. Bhasin, on instructions from the respondents, stated that they are not agreeable to the proposal as given by the counsel for the petitioners. We, therefore, directed the hearing of the writ petition after obtaining the affidavits and counter-affidavits.

(7) No doubt, Clause ll(4)(a) of the lease-deed dated June 25, 1971 provides the period during which the construction has to be made on the plot in dispute, yet guidelines have been laid for management of industrial land managed by the Delhi Administration. It provides for composition charges for belated construction. The concerned Heads of the departments are empowered to condone delays in construction of building with or without composition charges as the case may warrant. A general exemption was granted for the period up to December 31. 1978. A further exception is that in all cases where size of plots attracts the provisions of the Urban Land (Ceiling & Regulation) Act, 1976, the period taken from the date of submission of exemption application to the date of issue of the exemption order shall be excluded. The respondents in their letter dated May 6, 1977 (Annexure 'J') allowed the extension of time for construction of the factory on the said plot within one year from the date of exemption under the Urban Land (Ceiling & Regulation) Act, 1976. It is the common case that the exemption was granted on August ?0, 1980. In cases of default, composition charges are leviable at the rate of Rs. 2.00 , Rs. 2.00 , Rs. 21- and Rs. 4.00 per sq. mtr. for the first, second, third and fourth year respectively. Even though in the lease, it is stated that the time specified shall be of the essence of the contract, yet the provision for composition charges for belated construction shows that the period of completion of the building was not the essence of the contract.

(8) Mr. Ashok Bhasin, the learned counsel for the respondents has produced the original file. The petitioners asked for permission to start the construction after the receipt of the sanction of the building plans on August 22, 1983. The composition charges at the rate of Rs. 6.00 (Rs. 2.00 per year) sq. mtr. were calculated amounting to Rs. 12,260.00 and a proposal was made on the file to allow extension up to August 29,1984. This was obviously calculated on the basis that the exemption was granted under the Urban Land (Ceiling & Regulation) Act, 1976 on August 30, 1980 and a period of one year had already been given in the letter dated May 6, 1977 for completion of the building. It was thus calculated for a priod of three' years. It is not clear from the record whether the petitioners were called upon to deposit a sum of Rs. 12,260.00 towards composition charges.

(9) When the show cause notice dated February 14, 1985 was issued to the petitioners, they answered it by offering to pay the composition charges to be levied for granting extension up to December 31, 1986 and calculated itatRs.l8,000.00 . They also offered to pay further amount if required. This offer seems to have been accepted when the demand was made by the respondents in the letter dated April 7, 1985 calling upon the petitioners to deposit Rs. 18.000.00 as composition charges besides depositing the lease money. As already noticed this amount was deposited within a couple of weeks of the final notice dated, April 7, 1985.

(10) We have seen the noting portion of the file wherein it was mentioned that the petitioners could bs given for years extension from August 30,1981 and this period expired on August 29, 1985. However, in the same noting portion, it is noticed that the petitioners had paid a sum of Rs. l8,000.00 claiming an extension up to December 31, 1986. It is not clear either from the noting portion or from the impugned order as to bow this payment of 18.000.00 paid as composition as charges for extension up to December 31, 1986 and accepted by the respondents, was not considered as extension up to December 31. 1986.

(11) If the petitioners could be given extension of four years up to August 29, 1985 according to the declared policy of the respondents, then there was no reason to issue the show cause notice on February 14,1985 for cancellation of the lease. The petitioners should have been called upon to pay additional composition charges at the rate of Rs. 4.00 per sq. mtr. for the fourth year. The petitioners themselves offered to pay composition charges for granting extension up to December 31. 1986 and this was accepted by the respondents. Thus there was no reasonable basis to issue the cancellation period to December 31, 1986.

(12) As the declared policy of the respondents is to allow extension of time for construction of building after levy of composition charges and the petitioners had time up to December 31, 1986, the impugned order was thus wholly called for and we hereby quash the same.

(13) It would be in the interest of justice to lay down a time schedule. The time for completion of the construction according to the sanctioned plan which has since lapsed, is extended. The petitioners shall within one week from today, move the Delhi Development Authority for re-validation of the sanctioned plans. Within one year of the receipt of the re-validation of the sectioned plans, the petitioners shall complete the construction of the factory building on the aforesaid plot and move then the factory from the non-conforming area to the conforming area. In addition to the composition charges paid by the petitioners, for the addition one year, the petitioners shall pay composition charges at the rate of Rs. 4.00 per sq. mtr. The petitioners shall pay the arrears of the lease money as well as the additional composition charges within one week. On the fact and circumstances of the case, we make no order as to costs.