D.D.A. vs Maharaj Krishan Kapoor & Anr.
2009 Latest Caselaw 3101 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+                    LPA 1365/2007
D.D.A.                                            ..... Appellant
                                    Through:      Ms. Sangeeta Chandra,
                                                  Advocate
                                    Versus
MAHARAJ KRISHAN
KAPOOR & ANR.                                           ..... Respondents
                                    Through:      Mr. Aly Mirza, Advocate
                                                  for Respondent No.1

                                                  Mr.Virender Singh,
                                                  Advocate for Respondent
                                                  No.2/SBI

                       Reserved on : 16th July, 2009
%                      Date of Decision : 11th August, 2009

CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE MANMOHAN

1. Whether the Reporters of local papers may be allowed to see the judgment? No
2. To be referred to the Reporter or not? Yes
3. Whether the judgment should be reported in the Digest? Yes

                             JUDGMENT

MANMOHAN, J

1. The present Letters Patent Appeal has been filed challenging the

judgment dated 7th September, 2007 by virtue of which learned Single

Judge allowed respondent-owner's writ petition being W.P.(C) No.

4886/2006 and quashed appellant-DDA's demand of Rs. 36,23,538/-

for the period from 1st April, 1990 to 6th May, 1999. It is pertinent to

mention that the aforesaid demand had been raised by appellant-DDA

on account of alleged permission fee for running a branch of

respondent-SBI at respondent-owner's premises. However, learned

Single Judge gave liberty to appellant-DDA to proceed in accordance

with law against respondent-SBI for recovery of the aforesaid demand.

By way of the impugned order, learned Single Judge further directed

appellant-DDA to pass necessary orders within four weeks with regard

to respondent-owner's application for conversion of premises in

question from leasehold to freehold.

2. Briefly stated the material facts of the present case are that with

regard to premises bearing No. E-27, Saket, New Delhi the respondent-

owner and respondent-SBI executed three lease deeds dated 13th June,

1985, 16th January, 1992 and 8th February, 2001. By virtue of the

aforesaid three deeds, respondent-SBI was liable to pay

composition/permission fee as determined by appellant-DDA . In fact,

for the period from 1985 to 31st March, 1990, appellant-DDA by virtue

of power conferred under Proviso to Clause 13 of the Perpetual Lease

Deed granted permission to respondent-SBI to run its branch in

respondent-owner's premises subject to payment of composition

(permission) fee - which in fact was paid by respondent-SBI to

appellant-DDA .

3. However, as subsequently respondent-SBI filed a petition

challenging the rate at which permission fee had been levied, appellant-

DDA in 1990 did not extend the permission to run SBI's branch in the

aforesaid premises.

4. In fact, appellant-DDA initiated prosecution against respondent-

SBI in terms of Delhi Development Authority Act, 1957. The

prosecution proceedings initiated by appellant-DDA against

respondent-SBI were initially stayed by the Supreme Court and the

same were ultimately quashed vide order dated 29th November, 2006 in

Criminal Appeal No. 633/1996. The order dated 29 th November, 2006

is reproduced hereinbelow for ready reference :-

"Criminal Appeal No. 633/1996

We are told that in this appeal, 19 premises are involved where the State Bank of India was operating its branches. Some of the branches have ceased to operate and some have been regularised. Learned counsel for the State Bank of India states that only three branches which do not conform are operating and six months' time may be granted so that, in the meantime, the said branches may either cease the operation and/or ensure that the user conforms to the norms of the DDA. The time, as prayed for, is granted.

The appeal is disposed of in terms of the statement made by learned counsel for the appellant and, in this view, the complaints filed against the bank are quashed.

5. In the meantime, in pursuance to appellant-DDA's 1992

conversion policy, respondent-owner on 23rd December, 1999 applied

for conversion of his premises from leasehold to freehold. But on 3rd

March, 2006 appellant-DDA refused to convert the premises on the

ground that permission fee amounting to Rs. 36,23,538/- for the period

from 1st April, 1990 to 6th May, 1999 for running respondent-SBI

branch in the premises in question had not been paid.

6. Ms. Sangeeta Chandra, learned counsel for appellant-DDA

submitted that by virtue of covenants of the perpetual lease deed as well

as the conversion scheme, appellant-DDA was entitled to recover

misuse charges from the respondent-owner. According to Ms. Chandra,

learned Single Judge failed to appreciate that there was no privity of

contract between the appellant-DDA and respondent-SBI. She further

submitted that appellant-DDA was not bound by the terms and

conditions of the lease deed which made the respondent-SBI liable for

payment of misuse charges/permission fee. She further submitted that

just because a criminal prosecution initiated against the respondent-SBI

had been quashed by the Supreme Court, it did not mean that appellant-

DDA could not recover past misuse charges from the respondent-

owner.

7. On a perusal of the file, we find that though appellant-DDA was

always aware of the alleged misuse of premises, it never raised any

demand on this account against the respondent-owner. For alleged use

of the premises in contravention of the Perpetual Lease Deed,

appellant-DDA all throughout proceeded only against respondent-SBI.

Appellant-DDA not only initiated criminal prosecution against

respondent-SBI alone, but it also accepted payment of

composition/permission fee for the period 1985 to 1990 as well as from

1999 to 2002 from respondent-SBI. In fact, we find that the demand

for permission fee had never been raised against the respondent-owner.

8. In our opinion, appellant-DDA having decided to prosecute

respondent-SBI for misuse of premises in question and having been a

party to quashing of the said proceedings, cannot now insist that

respondent-owner should first make the payment of misuse charges

before appellant-DDA can grant conversion of the aforesaid premises.

In fact, we find that appellant-DDA's stance of recovery of misuse

charges is an afterthought and has been taken for the first time in the

present proceedings, as initially it was appellant-DDA's case that the

respondents were not entitled to any permission and for breach of the

Perpetual Lease covenants, respondent-SBI was liable to be criminally

prosecuted. Even in March, 2006 at the time of rejection of respondent-

owner's application, the appellant-DDA asked for payment of aforesaid

amount on account of permission fee and not misuse charges.

9. We are also in agreement with learned Single Judge that if indeed

the misuse had continued from 1st April, 1990 to 6th May, 1999 then

why did DDA not raise such a demand prior to 3rd March, 2006 against

the respondent-owner. Keeping in view the aforesaid, we are of the

opinion that the stance adopted by appellant-DDA is inequitable in the

facts and circumstances of this case.

10. Consequently, present appeal is dismissed but appellant-DDA is

given liberty to recover, if so permissible in law, the demand of

Rs. 36,23,538/- from respondent-SBI. However, Appellant-DDA is

directed to pass necessary orders granting conversion of premises in

question from leasehold to freehold and also to execute necessary

conveyance deed in favour of respondent-owner within a period of four

weeks from today.

MANMOHAN, J

CHIEF JUSTICE AUGUST 11, 2009 rn