Apeejay Surrendra Park Hotels ... vs New Delhi Municipal Council And ...
2002 Latest Caselaw 503 Del

JUDGMENT

Mahmood Ali Khan, J.

1. This revision petition challenges the order of an Additional District Judge dated 6.11.1996 by which he has dismissed an appeal filed by the petitioner under Section 9 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (in short the Act) and has affirmed the order of the Estate Officer.

2. Briefly the facts are that petitioner Northern Enterprises Corporation Pvt. Ltd. took on license basis from respondent No. 1 NDMC covered area of 1523 sq.ft. on 8th Floor of a multi storeyed building called Mayur Bhawan, near Connaught Place, New Delhi for a period 2 years w.e.f. 15.1.1981 at the rate of license fee of Rs. 6.60 per sq.ft. On the expiry of the license period it was renewed for further period of 5 years w.e.f. 15.1.1983 on the increase rate of license fee of Rs. 10.75 per sq.ft. During the period of said license the name of the petitioner company was changed from Northern Enterprises Corporation Pvt. Ltd. to Northern Enterprises Pvt. Ltd. and a fresh certificate of incorporation was issued and the respondent NDMC was informed of this change. In order to meet the requirement of Government Financial Institutions the name of the petitioner company was further changed to Northern Enterprises Ltd. and a new certificate of incorporation was issued on 24.7.1985 and by letter dated 20.8.1985 the respondent was duly informed of this change in the name. But respondent No. 1 took a stand that the terms of the license agreed to with the Northern Enterprises Corporation Pvt. Ltd. would not be applicable to the new company though offered to enter into a fresh agreement with Northern Enterprises Ltd. provided the license fee, was enhanced to Rs. 17.84 per sq.ft. from the date of the change in the name i.e. from 24.7.1985. The petitioner protested and did not agree. Respondent No. 1 thereupon filed an application under Section 7 of the Act before the Estate Officer for ejectment of the petitioner on the allegation that it was in unauthorised occupation of the premises. Respondent also claimed the enhanced license fee/damages besides interest @15% per annum on the amount of damages. In reply to the show cause notice the petitioner challenged the jurisdiction of the Estate Officer to initiate proceedings under Section 7 of the Act as the petitioner had not been in unauthorised occupation of the premises and was not liable to pay damages or interest as claimed by respondent No. 1 NDMC. The Estate Officer accepted the contention of the petitioner that the change in the name has not brought about change in the identity of the petitioner license and that the license fee was not payable at enhanced rate. He further held that the license fee at agreed rate was payable up to 14.1.1988. He directed the petitioner to pay arrears of damages @17.84 per sq.ft. from 15.11.1988 to the date of the vacation of the premises with interest @15% p.a. on the arrears.

3. The petitioner challenged this order before the Additional District Judge in an appeal. Learned Additional District Judge dismissed the appeal and affirmed the order of the Estate Officer. The petitioner is aggrieved and has filed this revision petition impugning the order of the learned Additional District Judge.

4. Counsel for petitioner has submitted that the petitioner has already vacated the premises on 05.08.1989 and has also paid the license fee. He stated that the petitioner was challenging the order of the learned Additional District Judge by which he had affirmed the order of the Estate Officer awarding interest @15% on the arrears. Referring to provision of Sub-section (2A) of Section 7 of the Act, it is argued that it is clearly stipulated that the interest on the arrears of license fee/damages etc. may be awarded by the Estate Officer at a rate "prescribed" and the Additional District Judge has failed to appreciate that no rate of interest has been prescribed yet under the rules framed there under. It was also argued that the rules framed in accordance with Section 18 of the said Act did not prescribe any rate of interest, therefore, the Estate Officer had no power or jurisdiction to award any interest whatsoever and direct the petitioner to pay it. He urged that the Additional District Judge had acted without jurisdiction and with material irregularity in exercise of his jurisdiction, therefore, the order is liable to be set aside.

5. On the other hand, counsel for respondent No. 1 NDMC contended that the Estate Officer was empowered by Sub-section (2) and (2A) of Section 7 of the Act to award interest on the arrears of rent/damages etc. He justified the order and prayed that the petition was liable to be dismissed.

6. This revision petition is filed to assail the order of the Additional District Judge which he passed in an appeal filed against the order of the Estate Officer under Section 9 of the Act. This order cannot be challenged in a revision petition filed under Section 115 of the CPC. The Additional District Judge deciding the appeal was acting as a tribunal and not as a court subordinate to the High Court, therefore, Section 115 of the CPC is not available to the petitioner for assailing this order.

7. However, this petition was filed on 10.2.1997 and it was admitted for hearing as a revision petition by this court on 26.10.1999, therefore, in my view it will be travesty of justice if the petition is dismissed on technicalities at this late stage. The respondent has not questioned the maintainability of this petition under Section 115 of the CPC. This Court even otherwise has ample power to convert this petition into a civil main petition and consider it as such. Therefore without passing a formal order for registering this petition as CM(Main) petition, since it would further delay in the disposal to an already over delayed case. I treat this petition under Article 227 of the Constitution of India in the peculiar facts and circumstances of the case. But I make it clear that it shall not be treated as a precedent in other cases.

8. The dispute raised is also otherwise limited to the question of awarding of interest on the amount of arrears of license fee/damages payable by the petitioner to the respondent.

9. Only question raised in this petition is whether the Estate Officer has power and jurisdiction to award interest on the arrears of rent/damages under Section 7(2A) of the Act before the rate of simple interest is prescribed?

10. The Estate Officer is given power by Sub-section (2) read with Sub-section (2A) of Section 7 of the Act to award simple interest on the arrears of rent or damages payable by the unauthorised occupant under Sub-section (2). Being relevant, Sub-sections (2) and (2A) are being extracted below:-

(2) Where any person is, or has at any time been, in unauthorised occupation of any public premises, the estate officer may, having regard to such principles of assessment of damages as may be prescribed, assess the damages on account of the use and occupation of such premises and may, by order, require that person to pay the damages within such time and in such Installments as may be specified in the order.

(2A) "While making an order under Sub-section (1) or Sub-section (2), the estate officer may direct that the arrears of rent or, as the case may be, damages shall be payable together with simple interest at such rate as may be prescribed, not being a rate exceeding the current rate of interest within the meaning of the Interest Act, 1978."

11. The maximum rate of interest awardable is the 'current rate of interest' as defined in the Interest Act. The Interest Act defines the expression "current rate of interest" by clause (b) of Section 2, which is as follows:-

"Current rate of interest" means the highest of the maximum rates at which interest may be paid on different classes of deposits (other than those maintained in savings or those maintained by charitable or religious institutions) by different classes of scheduled banks in accordance with the directions given or issued to banking companies generally by the Reserve Bank of India under the Banking Regulation Act, 1949 (10 of 1949).

Explanation.--In this clause, "scheduled bank" means a bank, not being a co-operative bank, transacting any business authorised by the Banking Regulation Act, 1949 (10 of 1949)".

12. Short argument of counsel for petitioner is that the rate of interest has not been "prescribed" in the Rules or otherwise so far, therefore, the Estate Officer has no power and jurisdiction to award interest on the amount of the arrears of rent and the damages which is payable under Sub-section (2) of Section 7 of the Act. This argument has no force. Reading of Sub-section (2A) of Section 7 of the Act and the expression "Current rate of interest" as defined in clause (b) of Section 2 of the Interest Act conjointly, it is menifest that the Estate Officer has discretion to award simple interest on the arrears of rent/damages recoverable from an unauthorised occupant. But the rate of interest is not to exceed the rate which scheduled banks pay on bank deposits (other than certain specified classes of deposit) as per direction of Reserve Bank of India. The jurisdiction of the Estate Officer is not ousted merely because the rate of simple interest has not been 'prescribed'. Even if it is prescribed, the maximum rate of interest can not exceed the bank rate as envisaged in clause (b) of Section 2 of the Interest Act. In my view the absence to specify the rate of interest by Rules or appropriate authority cannot nullify the legislative intent. The statutory provision cannot be held to be a dead letter till such time the interest rate is prescribed in the absence of clear words in the Act which may show such an intention on the part of the legislature. I am unable to find such intention from the provisions of the Act. Sub-section (2A) of Section 7 of the Act does not show that on account of inaction on the part of appropriate authority the legislative intent would remain in abeyance. In the absence of the prescribed interest rate the Estate Officer may award simple interest at the rate which is payable on bank deposits at relevant time and is considered fair and reasonable by him in the facts and circumstances of the case with the only stipulation that such interest rate shall in no case exceed the current rate of interest within the meaning of Interest Act.

13. According to the petitioner the rate of simple interest on ordinary bank deposits on the relevant date was 10% p.a. Respondent No. 1 has not been able to show that on the deposits mentioned in clause (b) of Section 2 of the Interest Act the scheduled banks in accordance with the guidelines of the RBI were paying simple interest at the rate higher than 10% p.a. It seems to be a reasonable and fair rate of simple interest. The order of the Estate Officer fixing interest at the rate of 15% per annum is manifestly unreasonable and not in accordance with law.

14. For the reasons stated above, there appears patent error in law in the order and exercise of jurisdiction by Estate Officer and the learned Additional District Judge in awarding interest @15% p.a. on the arrears of license fee/damages payable by the petitioner to respondent No. 1 till 5.8.1989 on which date the premises was vacated. It is appropriate that this court invoked its superintendance powers and extraordinary jurisdiction vested by Article 227 of the Constitution to intervene and correct menifest error in the order of the learned Additional District Judge impugned in this petition.

15. Though both the parties have filed the statements of accounts but they are at variance. The respondent shall calculate the amount of simple interest payable by the petitioner in terms of the order of Additional District Judge @10% p.a. instead of 15% p.a.

16. The petition stands disposed of accordingly leaving parties to bear their own cost.