Shri Ashwni Kumar Khanna vs Delhi Development Authority
2003 Latest Caselaw 137 Del

JUDGMENT

Sanjay Kishan Kaul, J.

1. A sub-lease deed was executed in respect of plot No. E-5/8, Vasant Vihar, New Delhi in favor of Smt. Kalan on 19.07.1972. The property was sold on a Power of Attorney basis to the petitioner herein on 28.04.1978, though the nature of transaction was of an agreement for construction along with a General Power of Attorney and Will with a provision that on the failure of the perpetual sub-lease deed to pay the amount in terms of the construction agreement, the property would vest with the petitioner. The agreement to sell was entered into on 20.12.1980 for an amount of Rs. 5.50 lacs and Smt. Kalan applied to the respondent for permission to sell the property to the petitioner in 1980.

2. The petitioner let out the property to one Shri Balbir Singh on 23.01.1981, who started running a guest house in a portion of the property in question. In the meantime on 18.08.1981, the respondent replied to Smt. Kalan in pursuance to her request for permission to transfer stating that she could apply for permission after expiry of 10 years from execution of the sub-lease and after three years from the date of completion of building.

3. In view of the misuse of the property, the DDA cancelled the lease deed on 19.08.1983 and Shri Balbir Singh, the tenant, filed a suit, which was registered as Suit No. 907/1983, against the DDA challenging the cancellation of the sub-lease deed. The petitioner was not made a party to the same. A restrained order was passed in January, 1984 against the DDA. Smt. Kalan expired on 08.02.1986. Shri Balbir Singh handed over possession of the property to the petitioner in January, 1989 and it is stated that the suit filed by Shri Balbir Singh was ultimately dismissed since the property had been vacated by him and the petitioner occupied the property himself. The petitioner claims that she even took steps in Suit No. 907/1983 to be imp leaded as a party, but the same was dismissed on 11.01.1990 on the ground that the petitioner was not the sub-leasee of the plot in question.

4. The petitioner in April, 1990 approached the respondent for transfer of the property in his name on the basis of the documents executed by Smt. Kalan in her favor including the Will. A suit was also filed in the Court of the Senior Sub-Judge for restraining the respondent from taking any action for dispossessing the petitioner, but the same was withdrawn with liberty to file a petition before this Court. The petitioner received a letter dated 19.11.1992 from the respondent in respect of the mutation and restoration of the sub-lease requiring the petitioner to pay an amount of Rs. 20,48,814/- as 50% unearned increase along with restoration charges and Rs. 32,604/-. The petitioner protested against the same on 15.01.1993, but the petitioner was informed by the respondent on 06.09.1993 that he must comply with the condition. A meeting was also held with the Officers of the respondent on 22.09.1993. The Officers of the Ministry of Urban Development were also present and a decision is stated to have been taken that only conversion charges would be charged since the scheme of conversion of properties from leasehold into freehold had come into existence. The petitioner made representations thereafter also, but in the absence of favorable response, filed the present writ petition for quashing of the demand raised and for transfer of mutation of the property in his name. In the counter affidavit filed on behalf of the respondents, it is stated that in terms of the policy of the respondent, they are entitled to charge the restoration charges apart from the normal conversion charges as also the damages for occupying the premises after determination of the sub-lease.

5. It may be noticed that the petitioner have applied for conversion of the property into freehold on 13.12.1994 and deposited the initial amount. The petitioner availed the benefit of the scheme of payment in Installments of the conversion charges.

6. The matter was re-examined during the pendency of the writ petition and a letter dated 08.01.2003 has been issued by the respondent to the petitioner on the issue of restoration of the sub-lease deed. The petitioner has been asked to pay restoration charges @ Rs. 3,000/- per annum amounting to Rs. 60,000/-, misuse charges amounting to Rs. 6,94,975/- and conversion charges to be paid at current rate less amount already deposited. The petitioner is, however, aggrieved by this subsequent demand.

7. Learned senior counsel for the petitioner assailed the demand made vide letter dated 08.01.2003 and contended that none of the three demands made vide letter dated 08.01.2003 are sustainable. As far as the issue of payment of conversion charges on current rates are concerned, the plea advanced on behalf of the petitioner is that the petitioner had applied on 30.12.1994 when the total amount required to be deposited by the petitioner was Rs. 2,21,682/- according to the rates prevalent in the said year while this amount would now come to Rs. 5,12,133/- on current rates. It was contended that the petitioner had made payment of Rs. 55,111/- out of the total conversion charges and the full and final payment of the conversion charges could not be made due to the cancellation of the sub-lease by the DDA. Further, the petitioner was entitled to the scheme of payment on Installment basis and the initial amount was deposited. It was, thus, contended that the conversion would relate back to the date of the application and at best interest could have been charged on the amount not deposited.

Learned counsel for the respondent, however, contended that the earlier rates were applicable only up to March, 2000 and since the petitioner failed to pay the five Installments of Rs. 54,892/- per Installments, the petitioner is not entitled to the benefits of the earlier rates.

8. Learned senior counsel for the petitioner further assailed the demand of misuse charges on the ground that the Master Plan of Delhi clearly states that the running of a guest house / lodging house where food is not served to outsiders is a permitted activity and the lease remains residential in nature.

9. Learned senior counsel for the petitioner referred to the judgments of this Court in R. Ramanujam v. Ajit Singh etc. reported as 1978 R.L.R. 378 and Bawa Holiday Home & Anr. v. Delhi Development Authority & Anr. to advance the proposition that the character of the residential lease does not change and remains residential where premises were let out for boarding houses and where food is not served to outsiders. It has been held that the residential user would not change merely because the premises are not used for the residence of a tenant or sub-tenant, but for the residence of more than one person through the establishment of a boarding and lodging house. If, however, food is served to non-residents, then it would acquire a commercial character. These are the cases which dealt with a situation where it was the tenant who was running the guest house as in the present case. Learned senior counsel for the petitioner submitted that the concept of a residential use is much wider than the concept of a residential house in the Delhi Rent Control Act in this behalf referred to the judgment of this Court in Smt. Savitri Devi Amar v. A.M. Bose reported as 1972 R.C.J. 815. It was observed in para 11 as under :-

"11. On the contrary the purpose of paragraph 2(6) of the lease is to promote town planning in the city of Delhi. This is why plots for house building are granted indicating the purpose for which the house built thereon are to be used. For instance at page 48 of the Master Plan for Delhi under the heading "Provisions regarding uses in 'use Zones'" -Residential-Uses Permitted are the 'residences, hostels and boarding houses' etc. All are included in residential uses together with various other uses which are only incidental to residential purposes. The concept of a residential use is thus much broader than the concept of a residential house in the Rent Control Act. The finding by Shri P.K. Jain, therefore, that the premises are let out for a residential use within the meaning of the lease and the Master Plan but not within the meaning of clause (e) of the proviso to sub-section (1) of Section 14 of the Delhi Rent Control Act, 1958. The appellant cannot, therefore, press his claim for eviction under clause (e) by availing himself of the finding of the civil court which is res-judicata between the parties."

10. Learned senior counsel also assailed this demand on another account. It was contended that no recovery can take place except in accordance with law and there must be authority vested for recovery of any such charges. It was, thus, contended that the DDA has no authority to levy the misuse charges as there is no such provision in the Delhi Development Act, 1957 (hereinafter to be referred to as, 'the said Act'). Learned senior counsel referred to the Division Bench judgment of this Court in DMA Nursing Home & Medical Establishment Forum v. Union of India & Ors. . The levy of permission fee / misuse fee for permitting mix land use of nursing houses, guest houses, banks, etc. was struck down on the ground that such levy without conferring any special advantage or service to the owners is ultra vires the Constitution of India and no provision had been made in the said Act for imposition of such fee or charges.

11. Learned counsel for the respondent, on the other hand, referred to the policy of permitting guest houses to be run in residential areas, which has the following requirements :-

"1. that landlord along with his family resides in same premises.

 2.   that the landlord will not use more than 8 rooms    for lodging the guests and will not lodge more     than two guests in one room, and  
 

 3. that no restaurant or eating place will be set up and  the kitchen will be used for providing food to the  guests only and not to the outsiders."  

 

 It was, thus, contended that since the petitioner was admittedly not residing in the same premises, but it was the tenant who was running the said guest house, the petitioner would not be covered by the policy.    

 

 12. Learned counsel for the respondent sought to explain the provisions of the Master Plan referred to by the learned senior counsel for the petitioner by submitting that it is only when the guest house is a part of approved lay-out plan or special permission has been obtained, such a guest house can be so run.    

 

13. The third aspect of the demands relates to the restoration charges. Learned senior counsel for the petitioner assailed the same on the ground that since there was no misuser, there could not have been any determination of the lease and, thus, there will be no question of levying any restoration charges. Learned counsel for the respondent, however, contended that the misuse does exist and the petitioner had in fact agreed to pay the same in terms of Annexure P-7. The petitioner stated in the said letter as under :-

  "Re.  :      Out of Court Settlement - Plot No. E-5/8,  
 
Vasant Vihar, New Delhi.  

 

 Dear Sir,  

 

 This has further reference to my application put for your consideration in response to your advertisement in the News Paper in the month of April, 1991.  It is more than a year that I have not received any communication from your goodself in the matter.  

 

 I may put for your kind consideration that I have already removed the 'Misuse' cause of the lease, that is, I have stopped the running of Guest House in the aforesaid premises i.e. E-5/8, Vasant Vihar, New Delhi which fact can be verified by your worthy staff at the time of inspection.  

 

 I earnestly request you goodself to please restore my lease of the above mentioned premises.  I am prepared to pay any restoration charges which are deemed fit by your department.  

 

I may also mention for your kind consideration that the above plot has been purchased by me on 'POWER OF ATtorNEY' and I would request you to please allow me to avail the benefit of Policy of conversion of Lease Hold plots to Freehold. I am prepared to pay the requisite conversion charges, the moment it is intimated to me by your goodself. I also undertake to withdraw the case from the Court of Law as and when I get the necessary intimation from your goodself as to the restoration of the Lease Deed.

Thanking you and assuring you of my maximum cooperation in the matter.

Needless to add that the above building is being purely used for Residential Purpose."

It was, thus, submitted that the lease can be restored only on payment of restoration charges, as claimed by the respondent.

14. I have considered the submissions advanced by the learned counsel for the parties. I consider it appropriate to first deal with the issue of the allegation of misuse of the property in question. Learned senior counsel for the petitioner referred to the provisions of the Master Plan, which had even been dealt with in the aforesaid judgments, as also the Master Plan - 2001 to submit that such lodging and guest houses are permitted as residential user. I find force in the contention of the learned senior counsel for the petitioner. In fact, this aspect of user of the residential premises for residence of more than one person has been considered in R. Ramanujam's case (Supra) and Bawa Holiday Home's case (Supra). It has been held that character of the residential lease does not change and remains residential. It may also be noticed that it would make no difference to the residential use merely by reason of the fact that instead of the owner running the guest house himself, it is the tenant running the same. It is the user which is the relevant and not who runs the guest house. It may also be noticed that in the judgments in question, it is the tenant who was running the guest house. Insofar as plea of the respondent in this behalf is concerned, the same is based on a letter issued to one of the persons and which has been filed along with the rejoinder of the petitioner. However, different letters have also been placed on record with the rejoinder where there is no such restriction. There are restrictions in terms of the number of uses, the number of rooms used and the number of guests in a room. The common thread, however, which runs through them is that no restaurant or eating place could be open except to the occupants of the building. The judgments mentioned above have also considered this aspect and came to the conclusion that it is only when non-residents are permitted use of restaurant and eating place, the user becomes a commercial user.

15. Once the Master Plan itself prescribes the residential user as residences, hotels and boarding houses, this provision cannot be watered down. I am also unable to appreciate the contention of the learned counsel for the respondent that the guest house should be a part of the approved lay-out plan or some special permission should be obtained when it is a permissible residential user. Even if there is a requirement of seeking permission for running the guest house, running of the same without such permission cannot convert the user from 'residential' to 'commercial'.

16. Insofar as letter of the petitioner Annexure P-7 as noted above is concerned, the same will not be any assistance to the respondent, since by a letter written by the petitioner, the user can neither be converted into commercial, if it is residential or vice-versa. The said letter has been written in the context of the objections of the respondent and the petitioner has stated that even the said guest house, which was running, had ceased to be so run in the premises. In that context, the petitioner had agreed to pay restoration charges. However, the restoration charges would be payable if there was violation of the terms of the lease, which had resulted in valid termination of the lease. That not being the position, the said letter cannot be used to impose liability on the petitioner.

17. I am, thus, of the considered view that the respondent is not entitled to recover the misuse charges of Rs. 6,94,975/- or any other sur-charge(s) thereon.

18. The petitioner has also been asked to pay restoration charges @ Rs. 3,000/- per month amounting to Rs. 60,000/-. Since there was no misuse, there could be no termination and, thus, there could be no question of restoration charges. Thus, this amount is also not liable to be paid by the petitioner.

19. The last aspect to be considered is the demand raised by the respondent of payment of current conversion charges less the payment already made. It may be noted that the petitioner had applied on 30.12.1994 and availing the benefit of the Installment scheme had deposited the first Installment of Rs. 55,111/-. The matter, however, got embroiled in the issue of restoration of the lease and the demand of the respondent for the charges in respect thereof. Thus, the petitioner cannot be faulted on this account and cannot be charged the current charges. The demand for conversion charges must relate back to the date of the application in such a situation.

20. I also consider a fair offer on the part of the petitioner that the balance Installments can now be paid in lump sum along with the interest to be specified by this Court. I, thus, consider it appropriate to direct that the balance Installments be paid by the petitioner along with overdue interest from the date the amount became due till the date of payment @ 12% per annum simple interest.

21. It is, thus, directed that the respondent should calculate the said amount as aforesaid and raise demand on the petitioner within a period of four weeks from today. In case of any delay on the part of the respondent, the respondent shall not be entitled to charge any further interest beyond this period of time. The petitioner should deposit the said amount within a period of four weeks of the demands being made.

22. A Writ of Mandamus is issued to transfer and mutate the property in favor of the petitioner and to convert it into freehold on the petitioner making the payment of the demand to be raised by the respondent as aforesaid. On the petitioner making the said payment and completing the necessary paper work, the conveyance deed should be executed and registered in favor of the petitioner and the needful be done within a period of three months of the payment being made by the petitioner.

23. The writ petition is allowed in the aforesaid terms, leaving the parties to bear their respective costs.