Holiday Club vs Delhi Development Authority And ...
2003 Latest Caselaw 1047 Del

JUDGMENT

Sanjay Kishan Kaul, J.

1. The petitioner society applied to respondent No. 1 Delhi Development Authority (DDA) on 08.05.1987 for allotment of land for a club in Panchsheel Enclave, New Delhi. The respondent No. 1 DDA issued an allotment letter dated 22.09.1987 communicating to the petitioner the decision to allot a plot of land measuring 1620 sq. mtrs. in Panchsheel Enclave (Masjid Moth Residential Scheme) for a club. The petitioner was required to communicate its acceptance along with a draft of Rs. 3,20,760/- which amount was duly paid by the petitioner.

2. The relevant clause in respect of the price of the plot is as under :-

" That the Society will be required to pay the cost of land measuring 1620 sq. mtrs. @ Rs. 8 lacs per acre provisionally with annual ground rent @ 2 1/2% per annum on the total premium. The Society shall also give an undertaking to the effect that they will pay the difference of cost of land as may be decided/demanded by the DDA."

3. The petitioner was further informed vide letter dated 04.10.1988 that a decision had been taken to grant license to the petitioner in respect of the land measuring 2511 sq. mtrs. for play field and lawn @ Rs. 28,772/- per month. The petitioner, however, protested on the rate of license fee vide letters dated 19.11.1988, 12.01.1989 and 14.12.1990, but the same was not acceded to.

4. The petitioner was issued another letter dated 6/11.01.1989 making a further payment of Rs. 8,49,062/- to be paid within 30 days from the date of issue of the letter, failing which the petitioner was to pay interest @ 18% per annum on belated payment. This demand was raised on account of the fact that the cost of institutional land had since been revised by the Government of India from Rs. 8 lacs per acre to Rs. 28.50 lacs per acre w.e.f. 01.04.1987. The petitioner represented against the said demand vide letter dated 02.03.1989, but to no avail.

5. The petitioner was issued a letter dated 09.04.1990 by DDA bringing to the notice of the petitioner that the additional amount towards cost of land as well as license fee had remained unpaid and the same should be paid with interest @ 18% per annum. This was followed up by a show- cause notice dated 30.05.1990 stating that on failure to pay the amount, the allotment would be cancelled. The petitioner once again made representations against the same on 24.04.1990. DDA thereafter issued the letter dated 06.02.1991 to the petitioner cancelling the allotment of land for the club and for the play field on account of failure of the petitioner to pay the amount. The possession of the land was sought for from the petitioner vide letter dated 14.03.1991. The petitioner made a detailed representation against the same on 12.03.1991, but DDA issued a notice under Section 4 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 ( hereinafter to be referred to as, `the said Act' ). The petitioner thereafter filed the present writ petition seeking quashing of the Order dated 06.02.1991 cancelling the allotment in favor of the petitioner and for directions against the respondent No. 1 DDA to charge the petitioner rates at no profit no loss basis for the plot and to charge for the play field at the rates as charged from similar other institutions.

6. Interim orders were granted in favor of the petitioner initially staying proceedings under the said Act vide Order dated 04.11.1991, which were modified by the Order dated 25.03.1994 permitting the proceedings to be carried on, but the petitioner not to be dispossessed without permission of the Court. The proceedings were thereafter initiated and an ex-parte eviction order was passed on 23.09.1994. However, in terms of the Order dated 02.03.1995, all proceedings before the Estate Officer was stayed. DDA was further permitted to issue a provisional demand @ Rs. 9.50 lacs per acre to be paid by the petitioner. This direction was subsequently passed in view of the reliance placed by the petitioner on the Division Bench judgment of this Court in Delhi Development Authority v. Lala Amar Nath Educational & Human Society & Anr., .

7. In the counter affidavit, it is stated that a reading of the allotment letter dated 22.09.1987 itself would show that the rate charged was provisional and the petitioner society was to give an undertaking that they would pay the difference of cost of the land as may be decided / demanded by DDA. It is further stated that the rates were revised subsequently by the Government of India vide letter dated 6/11.01.1989 w.e.f. 01.04.1987 and the petitioner was, thus, bound to pay the same. Insofar as the land made available on license basis for play field is concerned, it is stated that in case of educational institutions or co-operative house building societies, the land is made available on license fee basis without charging any premium at a nominal ground rent of Rs. 1/- per annum. This is stated to be on account of the fact that the co-operative society has developed the land and in case of educational institutions, the play field was required for the children. It is, thus, stated that these categories are class by themselves and the petitioner is not similarly situated. The petitioner was not a co-operative house building society, which developed the land nor is an educational institution. Thus, commercial rates have been charged for the play field, though for constructing the building of the club, institutional rates have been charged. It is further stated that another club being Panchsheel Club has been allotted land @ Rs. 1/- per annum being the house building society, which developed the land.

8. Reliance has also been placed on Rule 5 of the Delhi Development Authority (Disposal of Developed Nazul Land) Rules, 1981 ( hereinafter to be referred to as, `the said Rules'), which is as under :-

" 5. Rules of premium for allotment of Nazul land to certain public institutions.- The Authority may allot Nazul land to schools, colleges universities, hospitals, other social or charitable institutions, religious, political, semi-political organisations and local bodies for remunerative, semi-remunerative or unremunerative purposes at the premia and ground rent in force immediately before the coming into force of these rules, or at such rates as the Central Government may determine from time to time."

It is, thus, stated that the land can be allotted at a premia or at rates determined by the Central Government from time to time, which is what has been done in the present case.

9. It is further stated in the counter affidavit that the club run by the petitioner is a commercial venture and the play field by the club was proposed for recreational purposes, swimming pool and other activities and, thus, license fee rates have been accordingly charged. The basis for this land is also sought to be distinguished as the same is on license fee basis while the land for the building is on lease.

10. Learned counsel for the petitioner has primarily relied on judgment of the learned Single Judge of this Court in Rose Educational Scientific And Cultural Society (Regd.) & Ors. v. U.O.I. & Ors., . This judgment was delivered in a batch of writ petitions filed by societies, who were to set up educational institutions and had been allotted land. Provisional demand was raised for Rs. 8 lacs, as in the present case, and thereafter enhanced demand was sought to be recovered varying from Rs. 14.25 lacs per acre to Rs. 28.50 lacs per acre depending on the area where it was located.

11. In the aforesaid case, the stand of DDA was that the original rates were provisional and that the land rates are to be charged as determined by the Government of India from time to time. The Government explained the increase in rate from 01.04.1987. It was stated that the social, cultural and educational institutions were given land on the basis of no profit no loss rate, which was Rs. 8 lacs per acre from 01.04.1985 to 31.03.1987. This rate was increased to Rs. 9.5 lacs per acre w.e.f. 01.04.1987. However, a change was made in the aforesaid policy of no profit no loss rate, which would be applicable only for transfer of lands between the Central Government Departments. In respect of other zones, the land rates were revised on commercial basis and the land rate for South Delhi was more on account of there being a higher rate.

12. Learned Single Judge was of the view that the reading of the letter of allotment would show that though the rate was provisional, the price to be realised from the petitioners was the cost of land to the respondents. This was so as Rs. 8 lacs per acre was the cost of land which could have been revised. The policy of the Government was no profit no loss till issuance of the said letter, which was changed subsequently. It was, thus, held that the expression " difference of cost" occurring in the allotment letter in view of this background could only mean the increase in cost calculated at no profit no loss basis. Thus, the Government was not obliged to sell the land to the allottees at a loss, but no element of profit was also intended to be included therein by the Government. It was also held that the respondents were estopped from going back from their promise held out to the petitioners to allot the land at no profit no loss basis and the basis of allotment could not change. Since no profit no loss basis cost was Rs. 9.50 lacs per acre, it was the said cost which was made applicable.

13. The contention of learned counsel for the petitioner is that the aforesaid judgment in Rose Educational Scientific And Cultural Society (Regd.) & Ors.'s case (supra) applies on all fours to the case of the petitioner, which is identical.

14. A reference was also made to the judgment in appeal against Rose Educational Scientific And Cultural Society (Regd.) & Ors.'s case (supra), which was Lala Amar Nath Educational & Human Society & Anr.'s case (supra). The Division Bench fully agreed with the view of the learned Single Judge of this Court and further discussed the issue of promissory estoppel. It is, however, not necessary to go in detail in this respect, but it would suffice to say that the Division Bench observed that no one could imagine that in the allotment letter even a hint was thrown that the charges henceforth would be linked with the prevalent market value of land in Delhi. It was observed in para 12 as under :-

" 12. All through till the policy for the two years in question (1.4.1987 to 31.3.1989) was announced in October, 1988, the charges for the land allotted to educational societies had been on the basis of `no profit no loss'. Now when in the allotment letter a society was asked to pay at the rate of Rs. 8,00,000/- per acre, which was the rate prevalent for the earlier two years (1.4.1985 to 31.3.1987) and was further told that it would also pay difference of cost of land, as might be decided by the Government/D.D.A. it could only mean that basis for charges would nevertheless remain the same. No one could imagine that in the allotment letter even a hint was thrown that charges henceforth would be linked with the prevalent market value of land in Delhi. To a question in Parliament on 7.12.1988 the Minister of State in the Ministry of Urban Development, Government of India, stated that " the revision of rates had been done at no profit no loss basis to offset the increase in the cost of development for land." But as has been seen above, the figure given of land prices for different Zones in the counter affidavit of the Union of India the price was linked to the market value of the land prevalent in the Zones though the same was not the market value nor did this reflect the prices on the basis of `no profit no loss'. The Central Government has said that there was an element of subsidy in the prices charged. That would not be correct thing to say. Subsidy means when Government pays money to make prices lower or to make it cheaper to produce goods etc. or sells at a price lower than the cost incurred. That certainly is not the case here. The argument that " cost of land" in the allotment letter did not merely mean cost of acquisition, development and other overhead charges does not appeal to us. Accordingly in our view, " difference in cost of land" can mean nothing but the cost that the Government might ultimately had to incur by way of acquisition, enhancement of compensation and development and other overhead charges minus the price charged on provisional basis, basis nevertheless remaining the same which existed immediately for earlier years and which was no profit no loss. When such a term was inserted in the allotment letter, the societies paid at the rate of Rs. 8,00,000/- per acre, got possession of the land, no objection certificates were also issued by the D.D.A. and some of the societies even got their plans sanctioned and completed the construction of school buildings or were in the process of constructing."

15. Learned counsel for respondent No. 1 DDA, however, sought to contend by first stating that in Rose Educational Scientific And Cultural Society (Regd.) & Ors.'s case (supra), the learned Single Judge had observed in the end in para 15 that the Court was not deciding the validity of prices of the land, which may be fully justified and valid, but it was the issue of implementation of the policy where letter of allotment and lease deed had already been executed. It is stated that both the aforesaid judgments were subsequently considered by the Division Bench of this Court in Little Angles Public School Society & Ors. v. Union of India & Ors., (DB). It is further stated that the educational societies, who have challenged the costing in those writ petitions, cannot be equated with the petitioner herein, who is running a commercial club. In Little Angles Public School Society & Ors.'s case (supra), two concurring judgments were delivered and in this behalf, it would be useful to refer to the concurring judgment of Devinder Gupta, J., which has been relied upon by learned counsel for respondent No. 1 DDA. It would be relevant to re-produce the observations made as under :-

" 21. In the light of the aforementioned pleadings at the outset it may be observed that there is a marked difference between the facts of the cases in hand with those, which were the subject matter in Lala Amarnath's case (supra). As has been noticed above, the provisional rates, which the DDA had asked the Institutions to pay, which were covered by the decision in Lala Amarnath's case (supra) were the rates for the preceding year on " no profit no loss" basis; whereas in the allotment letters, which are the subject matter of the instant writ petitions "no profit no loss" rates of the preceding years is not the basis for the provisional rates. At no stage, the petitioners were ever assured or asked that they will be charged "no profit no loss rates". The petitioners were clearly informed through the offer letters that with reference to their application, land has been allotted at a rate, which was provisional subject to fixation of rate by the Government of India. There is no denial that the petitioners were apprised that they will have to pay the difference in rates, as and when decided by the Government of India and to furnish an undertaking to that effect. In Lala Amarnath's case (supra), the Court noticed the fact that when earlier the allotment letters were issued and the Societies gave undertakings to pay the difference of costs of land, all concerned were under the belief that any enhancement in the cost of land would be with reference to the increased cost of acquisition and other developmental charges and no one could even entertain a belief that basis of "no profit no loss" would altogether change and the authorities would demand difference in cost of land on the basis of market value in contravention of the conditions. In para-12 of the judgment, Court noticed that all through till the policy for two years, i.e., from 1.4.1987 to 31.3.1989 was announced in October, 1988, the charges for the land allotted to educational societies had been on the basis of "no profit no loss basis". Societies had been asked to pay at the rate of Rs. 8 lakhs per acre, which was the rate prevalent for the earlier two years and was "no profit no loss rate" and was further told that it would pay difference of cost of land, as might be decided by the Government. It would only mean that the basis for charges would nevertheless remain the same. No one could imagine that in the allotment letter even a hint was thrown that charges henceforth would be linked with the present market value in Delhi. Thus, even in Lala Amarnath's case (supra), the provisional rates were also "no profit no loss rates" for the preceding years, when the impugned demand in those cases was challenged. It was challenged on the ground that rates demanded were not " no profit no loss rates", but were linked with market value. Therefore, the basis for demand could not change from "no profit no loss rates" to rates linked to market value.

22. The ratio of the decision in Lala Amarnath's case (supra) cannot apply to the cases in hand. We are primarily concerned with the letter of allotment, in which the provisional rates, as notified, was the rate linked with market value for the preceding two years and had nothing to do with "no profit no loss rates". There is no material on record to suggest that any assurance was held out to the petitioners that allotment will be made or was being made on "no profit no loss" basis. Therefore, the stand of the petitioners is baseless. The petitioners had agreed to make payment of the balance amount, as and when determined by Central Government. Central Government has satisfactorily explained its policy and the basis for fixing the rates. The petitioners have neither challenged those basis on which the price has been determined nor have they challenged the zonal variant. There only case is that they are entitled to allotment of land on "no profit no loss" basis.

23. The Apex Court in a number of decisions has held that in price fixation, the executive has wide discretion and is only answerable provided there is any statutory control over its policy of price fixation, which in the instant case, is none as is reflected in Rule 5. It is no the function of the Court to sit in judgment and interfere in price fixation matters or over such matters of economic policy and it must be left to Government to decide the same. Reference be made to the decisions in Premji Bhai Parmar & Ors. v. DDA & Ors., 1980 SC 738 and Shri Sitaram Sugar Company Limited & Anr. v. Union of India & Ors., .

24. In Rama Nand v. Union of India & Ors., , Full Bench of this Court held that it is the premium calculated at the time prevailing, when firm offer of allotment is made by DDA that would publicly constitute the consideration for concluding a valid contract between the parties. The price of land prevailing at the time of communication of the letter of allotment is the rate payable by an allottee, as held in DDA v. Pushpender Kumar Jain, 1994 Supplement (3) SCC 494. The reason for this principle has been stated that in case the allottee is not willing to take or accept the allotment at the rates, it is always open to him to decline the allotment.

25. In the cases in hand, the petitioners were duly informed by DDA that the allotment was being made at provisional rates, which in the preceding two years were not the "no profit no loss" rates, but were the provisional market rates, which rates were under challenge in Lala Amarnath's case (supra). Therefore, petitioners knew, when they accepted the allotment and agreed and undertook to pay the difference that they were accepting, which were not the "no profit no loss" rates, but were the provisional market rates. As such, the petitioners are precluded from urging that they are entitled to allotment on "no profit no loss" basis or that they are bound to pay rates at " no profit no loss" basis. The rates which were prevalent in the preceding two years, were revised by the Government and there is no denial or dispute that the demand has been raised on the increased rates. The respondent DDA has asked the petitioners to pay the difference only on those basis, namely market rates, which were revised. The basis for the demand remains the same. There is no question of estoppel, nor any question of arbitrariness arises in this case. The petitions are misconceived and are liable to be dismissed."

16. Learned counsel for the petitioner in the end, however, offered that though the petitioner had good case on merits, the petitioner was even willing to pay the disputed amount and appropriate interest on the same as per the policy of DDA or to be fixed by the Court.

17. I have considered the submissions advanced by learned counsel for the parties.

18. In my considered view, the matter is in narrow compass in view of the judgments already delivered in the aforesaid three cases referred to by learned counsel for the parties. The case of the petitioner is that the petitioner is identically situated to the petitioners in Rose Educational Scientific And Cultural Society (Regd.) & Ors.'s case (supra). In this behalf, it would be useful to refer to the fact that in the counter affidavit itself. The DDA admits that insofar as the land allotted for the purpose of the club is concerned, institutional land rates have been applied. Rule 5 of the said Rules deals with allotment even to social institutions and this is the allotment made to the petitioner.

19. The basis of the judgment in Rose Educational Scientific And Cultural Society (Regd.) & Ors.'s case (supra) was that once the institutional rates of no profit no loss were applied and allotment letter issued, the expression " difference of cost" would only mean such increase of cost of land. The original cost of Rs. 8 lacs per acre was determined on no profit no loss basis. Thus, the permissible increase was also on the same basis and the increase was upheld only to the extent of Rs. 9.5 lacs per acre. This is also so in the present case as would be apparent from the letter of allotment dated 22.09.1987. Admittedly, it is the institutional rates of no profit no loss which have been made applicable while charging the petitioner @ Rs. 8 lacs per acre. The increase in cost, thus, would have to be recovered accordingly and the judgment in Rose Educational Scientific And Cultural Society (Regd.) & Ors.'s case (supra) upheld in Lala Amar Nath Educational & Human Society & Anr.'s case (supra) would squarely apply.

20. The basis for the judgment in Little Angles Public School Society & Ors.'s case (supra) was the fact that while the provisional demand letters in Rose Educational Scientific And Cultural Society (Regd.) & Ors.'s case (supra) were issued on the rate of no profit no loss; in Little Angles Public School Society & Ors.'s case (supra), the provisional demand itself was based on the market rate. This is, in fact, the very basis and is fortified by reference to the facts of certain petitions detailed out in the judgment of K. Ramamoorthy, J. It is after the new policy came into being that the letters of allotment had been issued in those cases. This distinguishing feature is quite apparent from the observations, which have been quoted above.

21. Despite the aforesaid fact, learned counsel for the petitioner has volunteered that in view of the fact that the petitioner is running a club, it is willing to pay differential amount with applicable rates of interest as per the directions of the Court or DDA policy provided cancellation of the lease is not given effect to and no other charges are levied.

22. Insofar as the land of the play field is concerned, the same has been given on license basis. Learned counsel for the respondent DDA in this behalf referred to Rule 44 of the said Rules, which is as under :-

" 44. Temporary allotment of Nazul-land.- The Authority may, subject to these rules and in such cases as it deems fit, allot land for temporary periods on a license basis, in accordance with the terms and conditions of the license- deed contained Form `D' appended to these rules. In addition, such license-deed may contain such other covenants, clauses or conditions, not inconsistent with the provisions of Form `D', as may be considered advisable and necessary by the Authority, in the circumstances of a case."

Thus, it is stated that the allotment is for temporary period on license basis and different principles would apply.

23. In my considered view, there is merit in the submission of learned counsel for the respondent DDA as it is appropriate to levy the commercial rates here, especially taking into consideration the fact that the area is adjacent to a club. The principles as applicable to a play field for children in a school cannot apply in the present case as that would be a class by itself taking into consideration the requirements of education. Further, the concessions are given to societies, which develop the land and that has already been done in the case of Panchsheel Club. Thus, the petitioner is liable to pay the license fee on commercial rates. In this behalf also, learned counsel for the petitioner volunteered to pay the amount with interest as per the policy of DDA.

24. It became necessary to pen down the aforesaid detailed judgment in view of the refusal of DDA to even accept the aforesaid proposal of the petitioner to pay the amount with interest.

25. In view of the fact that the petitioner has volunteered to pay the differential of the amount of Rs. 8,49,062/- with interest, despite conclusion reached aforesaid as also the fact that the user is for a club and not educational institution, I am of the considered view that cancellation of the lease and the license of the petitioner cannot be sustained and the said decision is hereby quashed. The petitioner is directed to pay the differential amount of Rs. 8,49,062/- less amount already paid of Rs.1.5 lacs per acre (differential of Rs. 9.5 lacs and Rs. 8 lacs) with interest @ 9% p.a. from due date till date of payment within two months from today. In case the respondent DDA has failed to raise the provisional demand in terms of the Order dated 02.03.1995 and the differential amount has not been paid, then the same would also be liable to be paid, but without interest. However, insofar as the license fee for the land allotted for the play field is concerned, the petitioner shall pay the amount from due date till date of payment with interest as per the policy of DDA and a demand in that behalf be sent by DDA to the petitioner within one month from today and the amount shall be paid within a period of two months thereafter.

26. The writ petition is allowed in the aforesaid terms leaving the parties to bear their own costs.