Pragati Construction Company ... vs Delhi Development Authority ...
2006 Latest Caselaw 217 Del

JUDGMENT

Madan B. Lokur, J.

Page 0480

1. The Appellant was the highest bidder in an auction conducted by the Delhi Development Authority (DDA) in 1972 in respect of plots No.47 and 48, Nehru Place, New Delhi. The bid given by the Appellant was thereafter confirmed and possession of the two plots was handed over to it some time in 1973.

Page 0481

2. One of the auction conditions related to payment of ground rent. This condition reads as follows:-

GROUND RENT:

(1) In addition the premium, the intending purchaser of the lease-hold rights in the plot shall have to pay a yearly ground rent. The ground rent will be at the rate of Re.1/- per plot per unit for the first three years allowed for construction purpose and thereafter, will be at the annual rate of 2-1/2% of the amount of premium.

(2) The ground rent will be enhanced after every 30 years provided that the increase in the rent at each such time shall not exceed 100% of that immediately before the enhancement is due.

3. The Appellant constructed a multistorey building on the plots and parted with possession in respect of various portions thereof to several sub-lessees/tenants/occupants. It appears that there was an agreement between the Appellant and the sub-lessees/occupants that they would pay a proportionate amount of ground rent to the Appellant, who would in turn pay it to the DDA. The DDA was not a party to this arrangement.

4. Some time in 1984, it appeared to the DDA that it had not received the ground rent in terms of the auction conditions. In view of this, the Assistant Collector (Grade-I) of the DDA (Respondent No.3) passed an order on 17th May, 1984 attaching the rent due to the Appellant and also restrained the Appellant from receiving any further rent from the sub-lessees/occupants. The Appellant was naturally aware of this order, yet it took no steps to challenge it. In fact, one of the contentions urged before us is that this order still subsists.

5. On or about 23rd September, 1992, the Assistant Collector passed an order against the Appellant to the effect that a sum of Rs. 6,81,139.81 was due from it towards ground rent and interest on belated payment in respect of the aforesaid plots of land. The Appellant was directed to make the payment on or before 8th October, 1992.

6. Feeling aggrieved by the demand, the Appellant preferred an appeal before the Collector (Nazul) of the DDA (Respondent No.2). In the appeal, the Appellant raised an issue about the correctness of the order dated 17th May, 1984 whereby the Appellant was restrained from recovering any amounts from the sub-lessees/occupants of the multistorey building and contended that in view of the restraint, it was not in a position to recover any money from them or to pay the ground rent to the DDA. The Collector (Nazul) found merit in this contention and by an order dated 1st March, 1993 remanded the matter to the Assistant Collector for passing suitable orders so that the recovery of ground rent is not hampered. The Appellant was also directed to deposit all amounts recovered by it within 15 days and to also give complete details of the arrears of payment due from the sub-lessees/occupants of the multistorey building. The Collector (Nazul) gave liberty to the Assistant Collector to raise a fresh demand within six weeks.

7. In compliance of the order dated 1st March 1993, the Appellant deposited a sum of Rs. 1,24,517.85 in the first week of April, 1993 towards ground rent. Page 0482The Assistant Collector also reconsidered the issues raised by the Appellant and issued a fresh demand of Rs. 6,16,788.21 by an order dated 21st March, 1994. Feeling aggrieved by the fresh demand, the Appellant filed an appeal before the Collector (Nazul) but by an order dated 5th June, 1995, the appeal was dismissed with liberty to the Assistant Collector to issue a revised demand. Pursuant thereto, the Assistant Collector raised a revised demand on 20th June, 1995 for a sum of Rs. 6,48,063.61.

8. Feeling aggrieved by the order dated 5th June, 1995 passed by the Collector (Nazul) as well as the revised demand dated 20th June, 1995 for Rs. 6,48,063.61, the Appellant filed a writ petition being WP (C) No.2348 of 1995 in this Court. By the impugned judgment and order dated 24th October, 2005, a learned Single Judge dismissed the writ petition while giving certain directions for resolving the issue of payment of ground rent.

9. Having heard learned counsel for the parties, we are of the view that there is no merit in this appeal. It is quite clear that the responsibility of payment of ground rent to the DDA rests entirely on the Appellant. Although the Appellant may have some sort of an arrangement for payment of ground rent with the sub-lessees/occupants of the multistorey building, it cannot shirk its responsibility of payment on the specious plea that it was not receiving any amounts from the sub-lessees/occupants. What amount the Appellant receives from the sub-lessees/occupants is an internal arrangement between them and it does not concern the DDA at all, which is entitled to receive ground rent from the Appellant.

10. It may be that because of the order dated 17th May, 1984 passed by the Assistant Collector, the Appellant was prohibited from receiving any amounts towards rent from the sub-lessees/occupants of the multistorey building, yet the fact remains that the Appellant took no steps to immediately challenge that order. The first step taken by the Appellant to protect its interest in this regard was only after it received the recovery notice dated 23rd September, 1992 for a sum of Rs. 6,81,139.81. It is only then that the Appellant filed an appeal before the Collector (Nazul).

11. Even so, the Collector (Nazul) appreciated the dilemma faced by the Appellant inasmuch as on the one hand it could not recover the rent from the sub-lessees/occupants of the multistorey building, and on the other it was required to pay ground rent to the DDA. Considering this, the appeal was allowed and the Assistant Collector was directed to look into the matter afresh. The result of this was that not only was the recovery notice dated 23rd September, 1992 set aside by the Collector (Nazul), but the order dated 17th May, 1984 was also set aside by necessary implication.

12. Even if it is assumed, as contended by learned counsel for the Appellant, that the order dated 17th May, 1984 was not set aside, it hardly makes any difference to the merits of the case inasmuch as the liability of the Appellant to pay ground rent to the DDA still remained. The Appellant could not shirk its responsibility merely because the order dated 17th May, 1984 supposedly came in its way. Since the entire responsibility of payment of ground rent was on the Appellant and not on anybody else, it was not the DDA's concern what relationship the Appellant had with the sub-lessees/occupants of the Page 0483multistorey building and whether it received any payments from them. If it is the contention of learned counsel for the Appellant that the order dated 17th May, 1984 is still subsisting, the responsibility for this must lie on the Appellant who has not yet directly challenged it. That being so, the Appellant cannot simply wish away its liability by relying on the order dated 17th May, 1984.

13. For the foregoing reasons, we do not find any error having been committed by the learned Single Judge in rejecting the claim of the Appellant seeking to avoid its liability of payment of ground rent.

14. In so far as the directions given by the learned Single Judge are concerned, we find them to be eminently reasonable. All that has been directed by the learned Single Judge is that the DDA would tabulate the payments received by it either from the Appellant or from the sub-lessees/occupants of the multistorey building and give the benefit of these receipts to the Appellant. The Appellant has also been given an opportunity to compute the payments made by it or by the sub-lessees/occupants of the multistorey building to the DDA and claim credit thereof. After reconciliation of the accounts, the Appellant has been directed to make the payment to the DDA and if there is any dispute, the Assistant Collector has been directed to pass a speaking order which can be challenged by the Appellant by filing an appeal before the Collector (Nazul).

15. Since there is no merit in this appeal, it is dismissed with costs of Rs. 5,000/-