Vinay Kumar Aggarwal vs Union Of India (Uoi)
2004 Latest Caselaw 437 Del

JUDGMENT

Sanjay Kishan Kaul, J.

1. Late Shri Lakshmi Chand was the perpetual lessee of Plot No.1 Block 90, 1, at Jain Mandir Road, New Delhi in pursuance to the lease deed executed on 15.03.1922 and constructed a double storyed building on the said plot some time in 1935. On his demise, the property was mutated vide mutation letter dated 06.06.1963 in the name of the petitioner.

2. It appears that soon thereafter the petitioner made certain additional constructions as per the Resolution of the New Delhi Municipal Committee but the respondent, Land & Development Office, Government of India, which was the perpetual Lesser refused to grant permission for the additional construction and further refused to regularise the misuse on the premises. This was set out in the letter dated 09.07.1969. It was further stated that the respondent was willing to reconsider the decision provided the petitioner complied with the terms set out in the letter requiring payment of certain additional charges. The petitioner did not comply with the terms of the letter but made a representation dated 14.11.1969 stating that the charges were exorbitant and the penalty should not be imposed. The respondent in turn vide letter dated 18.12.1969 rejected the representation and required the petitioner to comply with the terms and conditions of the letter dated 09.07.1969 within 15 days failing which the terms will be treated as cancelled and withdrawn and action would be taken against the petitioner under Clause 13 of the lease deed for violation of the terms and conditions of the lease deed. The petitioner, however, once again raised the same issues in the letter dated 27.01.1970 and the respondent vide letter dated 10.04.1970, on account of the failure of the petitioner to comply with the terms of the letter dated 09.07.1969, determined the lease of the petitioner and re-entered the premises with effect from 01.04.1970. The letter further stated that the Department has been directed to take possession of the premises from the petitioner.

3. The petitioner once again represented vide letter dated 04.06.1970 and was called to attend the office of the respondent. The petitioner vide letter dated 19.10.1971 raised the issue about the quantification of the demand vide letter dated 09.07.1969 of Rs.17,556.20 as charges for misuse as office of an area measuring 1205 sq. feet and stated that in any case the area of misuse is 120-6 square feet. It was stated that only one room was used as a personal office. Thereafter there were periodic reminders by the petitioner including request for any additional charges up-to-date under the rules. Even letters were addressed in 1983 and 1984 but there was no response from the respondent. The petitioner vide letter dated 16.06.1984 informed the respondent that the first floor and barsati floor were still in possession of the petitioner for purpose of residence and kept on requesting to intimate the misuse charges, if any. Vide letter dated 12.04.1993 the petitioner informed the respondent that entire premises were lying vacant since January 1993 and can be inspected at convenience.

4. The limited purpose why the aforesaid communications have been set out is to show that after 1970 there has been almost complete silence on the part of the respondent either to take any action in pursuance to the determination of the lease or to respond to the request of the petitioner.

5. In the year 1990 the scheme to convert such leasehold rights into freehold was introduced and a brochure was also issued in pursuance thereto in April 1992. However, this scheme was restricted to plots of land up to 500 sq. meters. This restriction was subsequently waived in terms of the new brochure issued in July 1999 and the concessional land rates of 1987 were made applicable as per the earlier scheme to even such plots up to 31.03.2000.

6. The petitioner applied under the said scheme for conversion of the property as aforesaid into freehold vide application dated 13.07.1999. On 20.07.1999, the petitioner stated that since the property continued to be re-entered as per information received by the petitioner and the application would be processed only if re-entry was withdrawn, charges for withdrawal of re-entry at the rate of Rs.3000/- per annum from the date of re-entry were deposited. This was stated to have been done in pursuance to a notification dated 25.06.1996. The application of the petitioner was, however, rejected vide letter dated 30.09.2002. The petitioner thus filed the present writ petition seeking quashing of the said letter dated 30.09.2002 and for restoration of the lease as per Clause 4(c) of the notification dated 25.06.1996 and Clause 1(c) of the notification dated 24.07.1996.

7. The stand of the respondent is that the leasehold rights of the petitioner stood determined as far back as 10.04.1970 and the said decision was never impugned by the petitioner in any proceedings. The application for conversion into freehold was rejected on account of the fact that the lease in favor of the petitioner was not subsisting and such an application could not be entertained.

8. In this behalf reliance is being made on the brochure for conversion issued in July 1999 where para 18 prescribes the grounds on which the conversion application could be rejected and in terms of para 18.1 where the lease stood determined/cancelled or the property stood re-entered, such an application could be rejected.

9. It may, however, be noted that the same brochure in para 11 prescribe that conversion could be granted even if there was a misuse of the property inasmuch as where a portion of the residential property was being put to non-residential use. The contention of learned counsel for the petitioner was that the misuse or the determination of the lease was immaterial in view of the scheme and various circulars/notifications issued by the respondent from time to time including dated 25.06.1996, 24.07.1996 and 28.06.1999. It was thus contended that the scheme has to be understood in the context of the circulars and stood partially modified as per the said circulars.

10. In so far as the issue of misuse is concerned, learned counsel for the respondent could not seriously dispute the proposition that the scheme provided for conversion from leasehold into freehold even in case where the property was being misused for commercial purposes. This aspect has been further examined in the judgment of the learned Single Judge of this Court in WP (C) 437/2001 M/s Indo Graphic Art Machinery Vs. DDA decided on 30.05.2002 where it was held that in view of the clear language of the scheme and the guidelines, the application was liable to be processed for conversion and the misuse would not be taken into account for the said purpose.

11. Learned counsel for the respondent, however, contended that the said principle could be applicable only in cases where a lease was subsisting and the material difference in the present case was that this lease stood determined long time back in 1970.

12. Learned counsel for the petitioner on the other hand relied upon the circular of the respondent dated 24.07.1996 dealing with the issue of conversion where in sub-para (c) it was stated as under :

"c) The fee for revocation of re-entry should be charged from the date of the re-entry to the date of allowing conversion because re-entry order could be deemed to have been withdrawn only from the date conversion to freehold is allowed by the competent authority."

13. It was thus contended that the conversion application cannot be rejected on the basis of re-entry but fee for revocation has to be charged. It was also emphasized that circular of 24.07.1996 was equally applicable to the scheme of 1999 because the scheme of 1999 was the same as of 1992, other than issue of the larger plot being allowed to be converted.

14. A reference was also made to the circular dated 25.06.1996 in respect of the conversion of leasehold tenure which prescribed the fee to be taken. The fee was, however, prescribed in cases where sale permissions were applied for. The crux of the circular is that even where sale permissions were applied for and unearned increase was deposited as per the terms of the lease deed but sale deed had not been executed, the amount of unearned increase deposited was to be in fact refunded. However, in such cases where the property has been re-entered, the re-entry order was liable to be revoked by the Lease Administering Authority on payment of prescribed charges of Rs.100 per day or Rs.3000 per annum and in such case no damages on account of being unauthorised occupation of the government property was to be levied. It would be useful to reproduce some of the terms of the said letter which are as under :

"4. In this connection it is further clarified that:-

a) In respect of misuse of properties or unauthorized construction thereon, if misuse is condonable as per master plan provisions/woning regulations or it is within the condonable items as prescribed by the Government, from time to time, no additional conversion fee will be charged in such cases as prescribed vide this Ministry's letter of even number, dated 8.4.1992.

b) In respect of other misuses, conversion to freehold will be available provided the area misused does not exceed 25% of the built up area or 500 sq. ft. conversion fee, as prescribed, will be charged.

c) In cases where applications for sale permission were made by the parties and in the process unearned increase was deposited, but sale deeds have not been executed, pursuant to the sale permission, refund/adjustment or the amount paid by the party will be available in case party approaches the Government of conversion of property on payment of the prescribed conversion fee/surcharge/Addl. Conversion fee, as applicable.

In such cases it is further clarified that where property has been re-entered, the re-entry order will be revoked by the lease administering authorities on payment of prescribed charges of Rs.100/- per day or Rs.3,000/- per annum and in such cases no damages on account of deemed unauthorized occupation of Government land/property will be levied by the lease administering authority while allowing conversion.

5. In respect of unauthorized construction and misuse of the property, i.e. use other than the designated one as reflected in the allotment letter/lease deed, it is further clarified that action to this effect could be taken by the concerned authorities under the building bye-laws and zoning regulations even after the properties have been converted into freehold.. Therefore, the role of the Local Body should not be exercised by the lease administering authorities and in such cases where misuse charges and damages for unauthorized construction, if any, claimed, prior to the receipt of the application for conversion, should only be charged before allowing conversion and no fresh demand need be raised by the lease administering authorities on this account as clarified earlier as well."

15. Learned counsel for the respondent thus contended that if there is re-entry of the property and the property is to be sold and the said property is to be converted into freehold on sale, re-entry can be withdrawn as per the aforesaid charges. Thus at best these are the charges to be levied because in the case of the petitioner he is the recorded lessee and there is not even a transaction of sale.

16. The respondent has, however, filed an affidavit making calculations of amount due from the petitioner which amounts to almost Rs.60 lakhs based on the area misused and the rates applicable from year to year. This is apart from the amount due prior to the date of the lease which has been stated to be Rs.14,331/-. This amount is reduced from the original demand as apparently the stand of the petitioner was found to be correct that misused area was less than the area for which the demand was raised in 1969. The letter dated 09.07.1969 calculated the payment on misuse charges on an area measuring 1205 sq. feet while the affidavit dated 12.03.2004 filed now by the respondent shows the misuse area as 859 sq. feet.

17. The conspectus of the aforesaid facts set out bring to light certain important aspects which have bearing on the determination of the present dispute. There is no doubt that the lease was determined by the letter dated 10.04.1970 but the respondent took no action in pursuance thereto. The respondent on its own volition chose not to act on the said letter while on the other hand petitioner continued to make representations repeatedly even thereafter but to no avail. There is no doubt that the petitioner has not impugned the letter in any substantive proceedings but the fact remains that the representations were made and the affidavit now filed by the respondent dated 12.03.2004 shows that at least to the extent the area of misuse is concerned, there was an error committed earlier since the area now mentioned is 859 sq. feet while in earlier letter dated 09.07.1969 the area was 1205 sq. feet. The affidavit dated 12.03.2004 further shows that at no stage of time was any further demand made from the petitioner and this is for the first time that this demand has been specified in the affidavit after the Court directed an affidavit to be filed setting out the basis as to what amount but petitioner would be liable to pay for the re-entry to be withdrawn. It has also to be appreciated that the respondent took about three years time to reject the application of the petitioner as the rejection letter was issued only on 30.09.2002 though the application for conversion was made in July 1999.

18. The scheme has remained more or less the same except that restrictions on the area of the plot which could be converted was subsequently withdrawn and the 1999 scheme gave an opportunity to avail of the concessional rates for the last time up to 31.03.2000. During the working of the scheme certain aspects arose which required the respondent to issue circular/notifications from time to time and thus they are applicable to the scheme as such, whether of 1992 or 1999. The scheme thus has to be read with the circulars.

19. The circular dated 28.06.1999 had in fact made the scheme applicable to plots over 500 sq. years. The reading of the circular dated 24.07.1996 makes it clear that application for conversion into freehold is not to be rejected merely because there is re-entry which has taken place. It is prescribed that the re-entry fee is to be charged from the date of re-entry to the date of allowing the conversion. The mode of charging of this re-entry fee was not specified but from the earlier circular dated 25.06.1996 it is obvious that the charges specified therein would apply to such withdrawal of re-entry. The earlier circular dated 25.06.1996 had specified the mode of charging of Rs.100 per day or Rs.3000/- per annum. There is no doubt that this rate was specified for re-entry wherein sale took place. Thus this was one step ahead of the case like that of the petitioner where there is mere re-entry and there is no further transfer being made. The circular even went to the extent of directing refund of the amount received for transfer as per the lease deed in case the conveyance deed has not been executed. The subsequent circular dated 24.07.1996 prescribing the fee for revocation of re-entry has thus to be read in that context. The petitioner certainly cannot be worse of than even persons who transferred the properties which were re-entered. It is also not disputed that the petitioner has deposited within time this re-entry fee when the petitioner came to know that his application could not be processed without paying the said amount.

20. The respondent cannot be permitted to claim damages of almost Rs.60 lakhs which is at market rate for different periods of time. If the respondent wanted to raise any demand, the demand should have been raised on the petitioner when the petitioner repeatedly was asking to specify the amounts over a period of time. It may be noted that in the affidavit dated 05.04.2004 , it is mentioned that the demand for charges was never raised after 1970.

21. I am thus of the considered view that the application of the petitioner could not have been rejected on the ground of re-entry but on the other hand in view of payment made, the application ought to have been processed. The impugned letter dated 30.09.2002 is thus liable to be quashed.

22. There is, however, one further aspect which arises from the fact that these charges have to be levied from the date of re-entry. However, there was a previous demand raised against the petitioner prior to the date of re-entry in 1969 which the petitioner did not challenge specifically though representations were made. Learned counsel for the petitioner during the course of the arguments without prejudice to his rights and contentions, offered to pay this amount which has been specified in the affidavit dated 12.03.2004. However, the affidavit further states that the petitioner is also liable to pay interest on the said amount at different rates as per the policy of the respondent.

23. Taking into consideration the facts and circumstances, I am of the considered view that the said charges along with interest should be paid by the petitioner. These amounts as set out in the affidavit are as under :

A

(i) Amount demanded vide this office letter dated 9.7.1969 Rs.14331.00

(ii) 6% interest on above amount w.e.f. 9.7.1969 to 31.10.1971 Rs.1930.00

(iii) 8% intrest from 4.10.1971 to 28.8.19785 Rs.4473.00

(iv) 10% interest from 29.8.1975 to 31.3.2001 Rs.36672.00

(v) 10% interest from 1.4.01 to 31.3.04 Rs.4299.00

24. A writ of mandamus is issued quashing the impugned letter dated 30.09.2002 with a direction to the petitioner to pay the aforesaid amounts including the interest for the period as per the original demand letter dated 09.07.1969 within one month from today and on the said amount being paid, the application of the petitioner be processed for conversion into freehold and the conveyance deed be executed in favor of petitioner within a maximum period of two months of the aforesaid payment being made. Needless to say that the petitioner will also complete any further formality required for the purpose of conversion into freehold.

25. The writ petition is allowed as aforesaid leaving the parties to bear their own costs.