Delhi High Court
Indudyog Company Ltd. vs Govt. Of Nct Of Delhi And Anr. on 12 November, 2003
Author: B D Ahmed
Bench: B D Ahmed
JUDGMENT
Badar Durrez Ahmed, J.
1. Rule.
2. With the consent of the parties the matter is taken up for final hearing and disposal.
3. The petitioner was allotted plot No. 40, Okhla Industrial Estate, New Delhi on perpetual lease by the respondents. The lease deed in respect thereof was executed on 5.2.1982. In this petition I am concerned with the interpretation of Clause 4(a) and the second proviso thereto of the said lease and the same are reproduced hereinbelow:-
"(4)(a) The Lessee shall not sell , transfer, assign or otherwise part with the possession of the whole or any part of the industrial plot except with the previous consent in writing of the Lesser which he shall be entitled to refuse in his absolute discretion.
PROVIDED that such consent shall not be given for a period of ten years from the commencement of this lease unless, in the opinion of the Lesser exceptional circumstances exist for the grant of such consent.
PROVIDED FURTHER that in the event of the consent being given, the Lesser may impose such terms and conditions as he thinks fit and the Lesser shall be entitled to claim and recover a portion of the unearned increase in the value (i.e. the difference between the premium paid and the market value) of the industrial plot at the time of sale, transfer, assignment, or parting with the possession, the amount to be recovered being fifty percent of the unearned increase and the decision of the Lesser in respect of the market value shall be final and binding.
PROVIDED FURTHER that the Lesser shall have the pre-emptive right to purchase the property after deducting fifty percent of the unearned increase."
4. The petitioner was issued a show cause notice on 13.6.1996 requiring it to show cause as to why the lease be not determined and the plot be not re-entered. Such show cause notice was issued on the allegation that the petitioner had committed the following violations of the conditions of the lease:-
"(1) No manufacturing activities are being carried out by the lessee.
(2) Unauthorised pass over (sic) the possession to M/s. M.S. Jersey India Industries."
In response thereto the petitioner submitted its reply dated 27.10.1996 in which the petitioner admitted that it had run into losses and in order to minimise the losses, it had an arrangement with one Jersey India Limited for a temporary period and that once they were able to do so the petitioner would start its own activity. From the reply it becomes apparent that the petitioner had suspended manufacturing activities of its own and secondly, that temporarily the said Jersey India Limited was running its activities from the plot in question. However, it was not disclosed as to what was the exact nature of the temporary arrangement between the petitioner and the said Jersey India Limited. Whether the arrangement was a mere license or a lease or whether it was something more amounting to a sale, transfer or assignment? These questions remain unanswered. Thereafter, the respondents and in particular the Deputy Secretary of Industries of the Government of NCT passed an order dated 14.8.2000 whereby the allotment of the Industrial shed to the petitioner was cancelled and the lease deed was determined. The petitioner was directed to hand over vacant possession of the said shed within thirty days of the receipt of the order. In the said order, it was indicated that a show cause notice had been issued on 13.6.1996 regarding the non-manufacturing activities and unauthorised passing of possession of the shed to Jersey India Limited. It was also noted that a report of the Estate Manager was called for which disclosed that in point of fact no manufacturing activities were being conducted by the petitioner at the shed and it was found closed. Further notices were issued to the petitioner in 1999 whereby the petitioner was asked to produce the documentary evidence in support of the manufacturing activities but the petitioner failed to do the same. Accordingly, it was held in the order that:-
"the unit is thus non-functional and closed. Moreover, there appears unauthorised transfer of shed."
5. Being aggrieved by the said order of cancellation dated 4.8.2000 the petitioner preferred an appeal. The appeal was disposed of by an order dated 29.1.2003 whereby it was agreed, in principle to restore the allotment of the shed subject to acceptance and fulfilllment of the following terms and conditions by the petitioner:-
"(a) To undertake and abide all the terms & conditions of the lease deed executed on 5.8.82.
(b) To pay the total sum towards the lease money up to date. An affidavit may be given on this.
(c) to pay the following sums in r/o the following:-
(1) 50% un-earned increase @ 1350 per sq. mt. Rs. 23.74,650.00
for an area of 1759 sq.mt. on 13.11.1995
(2) Regularisation charges- 13.11.1995 to 10.2.2000 Rs. 11,87,325.00
(3) Restoration charges Rs. 29,55,129.00
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Rs. 65,17,095.00"
The petitioner was also directed to confirm and furnish requisite documents and also to pay the above amount through a pay order in favor of the Commissioner of Industries, Government of NCT of Delhi within 30 days failing which interest at the rate of 18% would be charged on the above mentioned amount. The petitioner was aggrieved by the fact that while restoring the allotment to the petitioner, the petitioner was charged the amounts in respect of unearned increase and regularisation charges. In this regard the petitioner sent a letter dated 3.3.2001 to the respondents seeking the break up/details of the amounts mentioned in the aforesaid order dated 29.1.2001 as also to furnish a copy of the guidelines at the petitioner's cost. In this letter of 3.3.2001 it was clearly and categorically stated that the petitioner was ready and willing to pay the amount, which may found legally due from it. The nature of the break up of the dues that are sought to be recovered from the petitioner in terms of the order dated 29.1.2001 have been indicated in the reply of the respondents to CM 8191/2002 and the same is as under:-
"In reply to para 3 of the application it is submitted that the respondent has given the break up of the dues in the order dated 29.1.01. However, the same is given below also for ready reference:-
(a) 50% unearned increase @ Rs.1350/-
per sq. meter Rs.23,74,650.00
(b) Regularisation charges w.e.f. 13.11.95
To 10/2000 i.e. for 5 years i.e. 10%x5 Rs. 11,87,325.00
Of the unearned increase
(c) Restoration charges 1680x1759
as on 6/10/2000 @ Rs. 1680/- i.e.
25% of the market value Rs. 29,55,120.00
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Total Rs. 65,17,095.00
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From the above break -up it is clear that items (a) and (b) relate to unearned increase. Item (c) is "restoration charges" which are calculated at market value as on 6.10.2000. Insofar as items (a) and (b) are concerned, learned counsel appearing on behalf of the petitioner submits that since they are related to unearned increase the same have to be justified in terms of Clause 4(a) of the lease deed which provides for the circumstances under which amounts can be charged towards unearned increase. There is no dispute with regard to the restoration of the plot and/or the leased. The only disputes that survives in the present petition is with regard to the payment of this amount of unearned increase and regularisation charges which are also relatable to unearned increase. The Learned counsel for the petitioner submits that unearned increase can only be charged when there is a sale, transfer, assignment or permanent parting with possession of the whole or any part of the plot in question. If that is the case then no unearned increase can at all be levied or collected from the petitioner under the said lease. In this case, he submits at the highest the occupation of M/s Jersey India Limited could be regarded as a sub-lessee and, in point of fact, Jersey India Ltd was only a permissive occupant or licensee. This being the case, the learned counsel for the petitioner submits that there is no sale, transfer, assignment or parting with possession as contemplated under the said clause and, therefore, no amount by way of unearned increase could be charged from the petitioner.
6. On the other hand, Mr. Kailash Gambhir, learned counsel appearing for the respondents submitted that it is an admitted position that the petitioner had stopped manufacturing activities. This admission is clear from paragraph 4 of the writ petition itself. It is also an admitted position that the petitioner had introduced Jersey India Limited into the plot in question and, therefore, the clause would be applicable and the petitioner would be liable to pay the amount towards unearned increase. He further submitted that the petitioner has till date not disclosed what is the exact nature of the relationship between the petitioner and the said Jersey India Limited.
7. Construing clause 4(a) it does appear that there must be a sale, transfer, assignment or parting with possession for invocation of the clause which would entitle the respondents to charge any amount by way of unearned increase. There is no sale, transfer or assignment in the present case. Learned counsel for the respondents submitted that it was for the petitioner to disclose the exact nature of the arrangement. There may be a sale or transfer or assignment of which they are not aware of. If the respondents are to charge or collect any amount by way of unearned increase then it is for them to establish that there was a sale, transfer or assignment. They cannot assume that there are a sale, transfer or assignment and then charge the amount by way of unearned increase. Insofar as parting with possession is concerned, I feel that this expression has to be read as ejusdem generis with the words "sale, transfer or assignment". There must be a degree of permanence in respect of the parting with possession. On a pointed question being asked, I was informed that at present the petitioner is in possession of the entire plot in question and Jersey India Limited no longer operates from there. As such, it does appear that there was no parting with of possession in the permanent sense so as to constitute a `transfer' and entitle the respondents to recover any amount by way of unearned increase. The occupation of Jersey India Limited of the said plot was merely of a transient nature and for a temporary period. Thus, in view of the aforesaid discussion it becomes clear that no amount can be recovered from the petitioner in respect of items 1 and 2 mentioned in the order dated 29.1.2001 which are clearly relateable to unearned increase which can only arise where there is a sale, transfer, assignment or parting with possession in a permanent sense. Insofar as restoration charges (item 3) are concerned, they are clearly not relateable to the question of charging unearned increase and, therefore, the same have to be paid by the petitioner.
8. The writ petition is partly allowed to the extent indicated above. No order as to costs.
