Mahesh Chand Goyal & Ors. vs Genious Promoters & Developers ...
2010 Latest Caselaw 2844 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI

+       FAO(OS) No.35/2010 & CM No.679/2010

Mahesh Chand Goyal & Ors.              .....Appellant through
                                       Mr. Ravinder Sethi, Sr. Adv.
                                       with Mr. Rajiv Kumar
                                       Gawana, Mr. Anil Grover &
                                       Mr. Puneet Sharma, Advs.

                    versus

Genious Promoters & Developers
Pvt. Ltd.                              .....Respondent through
                                       Mr. T.K. Ganju, Sr. Adv. with
                                       Mr. A.K. Thakur & Mr. R.K.
                                       Mishra, Advs.
                                       Mr. Rajiv Bansal, Adv. for
                                       the DDA

%                         Date of Hearing: May 05, 2010

                          Date of Decision: May 31, 2010

        CORAM:
*       HON'BLE MR. JUSTICE VIKRAMAJIT SEN
        HON'BLE MR. JUSTICE A.K. PATHAK
        1. Whether reporters of local papers may be
           allowed to see the Judgment?                  Yes
        2. To be referred to the Reporter or not?        Yes
        3. Whether the Judgment should be reported
           in the Digest?                                Yes

VIKRAMAJIT SEN, J.

1. A neat question of law has arisen before us, the answer to

which will indubitably have widespread repercussions. The

Appellants contend that since user of premises for a Banquet Hall

is commercial in nature, wherever commercial user is postulated

and is permissible in law, no further restrictions are imposable. By

a Perpetual Lease dated 10.11.2003, a parcel of land was leased

out by the Delhi Development Authority (DDA) in favour of the

Appellants. The first recital in the Perpetual Lease Deed makes a

mention that - "an auction was conducted on 21.7.2003 for the

grant of the lease hold rights of a commercial plot of land to be

used as Retail/departmental Store purpose hereinafter described,

belonging to the Lessor". The proviso to Clause 14 of the perpetual

Lease Deed reads - "PROVIDED that, if the Lessee is desirous of

using the said commercial plot or the building thereon for a

purpose other than that Retail/Deptt. Store the Lessor may allow

such change of user on such terms and conditions including

payment of additional premium and additional rent, as the Lessor

may in this absolute discretion determine". The DDA has

subsequently issued an Occupancy Certificate dated 23.12.2005,

which, in the description of „Construction‟, clarifies that Ground

Floor, First Floor, Second Floor and Third Floor is "retail space

(hall)" on each Floor. The Appellants have thereafter got the

Perpetual Lease Deed converted to Freehold, as is evident from a

perusal of the Conveyance Deed dated 21.4.2006. The Deed speaks

of "a piece and parcel of commercial/mixed use land measuring

1998 sq. mts. situated at Central Business Distt. at CBD(East)".

Clause 2 of the Conveyance Deed reads as follows:-

2. That notwithstanding execution of this deed, use of the property in contravention of the provisions of Master Plan/Zonal Development Plan/Lay-out Plan/Architectural Development Controls/sanctioned building plan shall not

be deemed to have been condoned or permitted in any manner and Delhi Development Authority shall be entitled to take appropriate action for contraventions past, present or future, of Section-14 of the Delhi Development Act or any other law in force for the time being. Likewise any future violation of the above mentioned provisions shall invite action as per law.

2. The Promoter/Respondent has executed a Conveyance Deed

dated 21.6.2006 in respect of Commercial Space measuring 1928

square feet on the First Floor along with proportionate undivided,

indivisible and impartible ownership rights in the Plot bearing

No.3, CBD (East), Shahdara, Delhi in favour of Mrs. Sahiba

Aggarwal. Mrs. Sahiba Aggarwal, along with her husband and

other relatives, are the Appellants before us who had intentions to

use the said property for purposes of a Banquet Hall.

3. Apprehending this user, the Respondent/Plaintiff filed Suit

No.1899/2009 in this Court. On the first date of hearing, the

learned Single Judge recorded that whilst the premises were

commercial in nature, Clause 14 of the Conveyance Deed

postulates change of user subject to the concurrence of the

superior lessor on conditions imposed by the latter. The learned

Single Judge recorded that no change of user has been lawfully

obtained. He, therefore, allowed the Plaintiff‟s application under

Order XXXIX Rules 1 and 2 injuncting the Defendants/Appellants

from running a Banquet Hall in the suit premises. It is these

Orders dated 9.10.2009 which have been assailed before us.

4. Mr. Ravinder Sethi, learned Senior Counsel for the

Appellant, contends that since the premises are commercial in

nature and postulate commercial user, the Appellants are fully

empowered and entitled to use them for any commercial purpose,

which avowedly and undisputedly includes user as a Banquet Hall.

We have already reproduced Clause 2 of the Conveyance Deed

dated 21.4.2006. In addition thereto, Mr. Sethi places reliance on

Clause 9 of the Conveyance Deed between the parties which

stipulates that -"The Vendee shall not use/cause to be used the

said Premises for any other purpose except permissible

commercial use, as specified by the DDA in its Zoning Plan/Master

Plan, Guidelines etc., and/or shall not cause any violation of any

terms and conditions of the Master Plan/Zoning Plan, guidelines as

applicable to the Premises. The Vendee specifically undertakes not

to use the said premises for any prohibited/irregular/illegal

activity. In the event, the Vendee allowing the use of the said

premises, under any arrangement, by a third party, the

indenture(s) so to be executed between the Vendee and such third

party, shall be intimated to the Maintenance Service Provider to

ensure all statutory compliances, clearance of outstanding dues, if

any, to prevent breach/violation of any of the applicable laws". The

contention of Mr. Sethi is that Clause 5(1) of the Master Plan -

2021 elaborates a 5 tier system of commercial areas and under the

sub-head of „District Centre‟ makes a mention not only of „retail

shopping‟ but also of „restaurants, banquet halls, etc‟. Mr. Sethi

clarifies that a reading of Clause 5.4 of Master Plan - 2021 leaves

no manner of doubt that Laxmi Nagar, where the building is

located, falls under the category of a „District Centre‟. He further

emphasizes that Chapter 15 of the Master Plan - 2021 contains the

„Mixed Use Regulations‟, Clause 15.7.4 whereof poignantly

mentions that a Banquet Hall shall also be permissible in industrial

and commercial areas including notified commercial streets under

Mixed Use Regulations ..... etc. Predicated on these provisions, he

forcefully contends that the Appellants/Defendants are fully

entitled to use the suit property as a Banquet Hall.

5. Mr. T.K. Ganju, learned Senior Counsel for the

Respondent/Plaintiff, has substantially rested his case on an

Affidavit dated 13.3.2010 filed by the Director (Master Plan), DDA,

which merits reproduction:-

3. That Plot No.3, Central Business District (CBD) (East), Shahdara, Delhi - 110 092 is an integrated part of comprehensive Scheme of Sub CBD Shahdara having been designed and disposed of as per MPD 2001 norms. The detail of plot No.3 as per approved Layout Plan of Sub CBD Shahdara is as under:-

Plot No.    Area       B.U.A.       Phase       Land Use        No.      of
                                                                Floors
3           1998       5770.69      1           Retail,         4
                                                Departmental
                                                Store

A copy of the approved layout Plan is annexed hereto and marked as „Annexure-A‟

4. That as per the drawing prepared by Housing and Urban Project Wing (HUPW) the user of the Plot is "Retail Departmental Store". The Sub Central Business District (Sub CBD) was planned under MPD-2001 norms and Banquet Hall was not a permissible activity in such centers. Whereas, it is included as an „activity permitted‟ under MPD-2021 which is enforced from 7-2-07 onwards. A copy of Table 5.1 : setting out "Five-Tier System of Commercial Areas" under MPD-2021 is annexed hereto and marked as Annexure-B.

5. That the Commercial Centers namely Metropolitan City Centers, District Centers, Community Centers etc. are planned in a comprehensive manner as an „Integrated Plan‟ and the use on premises/plot level are demarcated at a design level only and further auctioned for the specified uses as per the approved plan from all the statuary authority authorities like DDA/MCD, DUAC, Delhi Fire Services.

6. That within the commercial land use the different activities like retail business, offices, cinemas, hotel etc. fetch different price value in an auction. This implies that the change of activity permitted on a plot from the activity designated at the time of planning and disposal to any other activity shall have a bearing on the auction value and the property owner/occupier has no right to use the property for an activity other than the designated activity.

       7.   That   the   change    of   activity     from    that    of
       designated/designed/auctioned     activity,   to     any   other

permitted use/activity as per MPD 2021 as on date has

implications such as financial, provision of services, traffic management and other safety measures etc. therefore would require examination at a scheme level for grant of such permission.

6. Mr. Ganju has also drawn our attention to two letters

addressed to the Respondent by the DDA. In the first, dated

12.12.2005, the Respondent had been informed that - "Plot No.3,

CBD (East) Shahdara is a commercial plot of Central Business

District. As per the Master Plan, Shopping (Retail, Service, Repair

& Limited Wholesale), Informal Shopping, Commercial Offices are

allowed in the commercial plot. As per the specific architectural

controls, the use is retail/departmental store". The second letter is

dated 22.2.2007 and informs the Respondent that - "Plot No.3,

CBD(East) Shahdara is a commercial plot of Central Business

District. As per the Master Plan, Shopping(Retail, Service, Repair

& Limited Wholesale), Informal shopping, Commercial Offices are

allowed in the commercial plot. As per the specific architectural

controls, the use of ground floor, First Floor, Second Floor, Third

Floor & Basement floor are for retail departmental store as the

basement area has already been taken in the FAR".

7. We are unable to agree with the contentions of the learned

Senior Counsel for the Appellants, and though the impugned Order

is conspicuous by its brevity, we concur with its outcome. Town

Planning is a specialization and work of art. It requires the Planner

to look into myriad needs of society and in that intricate

perspective specify the manner in which the portions of the city

are to be used. This user has several shades and hues; to predicate

that commercial user encompasses and accepts all such enterprise,

is a dangerous oversimplification. A reading of the Perpetual Lease

Deed between the Respondent and the DDA makes it elaborately

and uncontrovertedly clear that a land was allotted to the

Respondent for use as retail/departmental store. This covenant was

the determinate factor of the price procured at the auction

conducted in this regard. As has already been noted, the

Occupancy Certificate makes a similar stipulation. A reading of

these documents would, therefore, should have made it

unquestionably clear to the Appellants that the building

constructed on the plot was to be used for a particular aspect of

commercial activity, namely, retail/departmental store. There is no

gainsaying that the land could have been auctioned even for a

„Banquet Hall‟ which would subsequently have been in conformity

with MPD-2021. Had the subject building been constructed on a

plot earmarked for a Banquet Hall or a restaurant or any other

purpose specifically mentioned at the time of auction and/or in the

perpetual Lease, the Appellants could not have been prohibited

from resorting to such user. We had mentioned at the

commencement of the Judgment that the problem posed before us

has ubiquitous ramifications. Let us take the case of a Local

Shopping Centre. The Authorities, as City or Town Planners, are

duty bound to conceptualize the possible needs of residents of the

area and accordingly provide for shops for hairdressers, butchers,

vegetable vendors etc., as also other multifarious commercial

activities. Shops or spaces earmarked for user as hairdressers and

meat shop etc. would obviously not fetch the same offers as those

for more profitable commercial ventures. To permit a person to

make a bid for a barber shop and thereafter run a restaurant would

be doing violence to the Town Planners scheme of things. It would

also force residents of the area to travel distances to other markets

in order to avail of services which were intended to be available in

the local area. We have seen several aberrations in this regard in

Delhi, leading to grave inconvenience and harassment to the local

residents. To name only a few, Local Shopping Centre in the

Diplomatic Enclave area, New Delhi has been transformed into

various restaurants and eateries. Areas of Greater Kailash-II

Market, New Delhi are now either sanitary goods shops or

restaurants. This makes the local residents face not just

inconvenience of having to travel to other markets for services

which were initially intended to be available there, but also to

suffer the nuisance of customers coming from all other areas to

shop at the local area. This is impermissible. The parties must be

strictly governed by the terms on which the Conveyance Deed was

granted regardless of whether the land has metamorphosed from

Leasehold to Freehold.

8. Mr. Sethi has contended that the Respondent has converted

the property from perpetual Lease to Freehold. In our view, this

does not enable anyone tracing rights to the principal Conveyance

Deed to use the property for purposes other than the original

allotment. Residential properties which were taken on lease are

frequently changed to freehold. That does not release the parties

from the obligation to use the premises only for residential

purposes. The fact that the property is Leasehold in character has

no relevance to the user thereof. That user must be in conformity

with the initial prescribed user of the Master Plan.

9. There was some argument on whether it would be

permissible to refer to the provisions in the MPD-2021. The user

stipulated in the initial document would continue to hold force until

and unless a change is effected by the Authority concerned, which,

in the present case, is the DDA. Having said this, we may also put

in a word of caution for the reasons already expanded upon above.

The Authorities may not be empowered to whimsically change the

user only because the party concerned is willing to pay conversion

charges. In the context of the present case, it matters little

whether an understanding is arrived at between the Respondent

(who remains the owner of the Basement) and the Appellants,

since regardless thereof it will not be legal for the Appellants to

use the property for a Banquet Hall.

10. Our research has led us to three decisions which justify

mention. We are fortified in the view we have taken by the dictum

of Supreme Court in this aspect of law concerning town planning

as expounded in Union of India -vs- Dev Raj Gupta, (1991) 1 SCC

63 where the issue was whether the owners of residential property

became automatically entitled to use it for commercial purpose

after coming into force of new Master Plan describing the area as

commercial. The Supreme Court in its considered opinion held that

the High Court failed to appreciate that the change of user of the

land permitted by the Plan was only enabling in nature. It lifted the

restriction which was otherwise there for using the land for

commercial purpose. The land has to be used as per the agreement

between the contracting parties, and no change of the user can be

made contrary to the agreement even if the Plan permits such

user. The Plan helps the parties to change the user, if the parties

mutually agree to do so. It does not permit the occupant to change

the user unilaterally. It is not, therefore, correct to say that no

permission of the landlord is needed to change the user of the

land. In the case of State of Rajasthan -vs- H.V. Hotels (P) Ltd.,

(2007) 2 SCC 468 the Court was confronted with an agreement

between the State of Rajasthan and the Respondent wherein the

parameters of construction were set out and the floor area ratio

was given as 1.0. There was also a stipulation that consequent

upon any change in building bye-laws framed by the local

authorities, including the Jaipur Development Authority, if the

buyer got additional floor area ratio or any relaxation, the State

would have no objection, so long as the same are permitted by the

bye-laws prevailing from time to time. The plea of the State was

that such a clause cannot act as an estoppel against them from

enforcing the bye-laws applicable at the time of auction which

pinned down the purchaser to the FAR prescribed at the time of

purchase. Upholding this argument, the Hon‟ble Supreme Court

observed thus:-

14. ... The power to relax a building rule, regulation or requirement is an exception to the rule and it is to be used with caution and to justify or condone minimum bona fide violations or deviations. The purchaser bid at the auction with eyes open and with the knowledge that the floor area ratio, as one of the parameters applicable, was 1.0 at the relevant time. The purchaser in fact was able to get the land user changed, whether it was proper to permit such change of user. But, merely because subsequently the bye-laws have been amended, it does not mean that the parameters should be relaxed in favour of the purchaser. That would be clearly an erroneous approach to the question of relaxation and assumption of such a power would mean the nullification of building rules themselves and the object sought to be achieved by the building rules and the need to have planned development of cities and towns in the interests of posterity. Therefore, in our view, there is no merit in the plea based on the power to relax contained in the amended bye-laws.

15. We do not see anything inequitable in the purchaser being pinned down to his obligation under the sale by auction. Building regulations are in public interest. Courts have a duty to protect public interest particularly when they do not interfere with any of the fundamental rights of the purchaser. The plea based on alleged equity cannot be accepted.

11. In Lawntown Ltd. -vs- Camenzuli, [2008] 1 WLR 2656 the

Court of Appeal was concerned with the conversion of a single

dwelling house into two self contained flats. In a detailed

Judgment, which we respectfully recommend to be read fully, the

Court took several factors into view, including density of

occupation, traffic noise, fumes and congestion and parking as well

as preservation of the character of the neighborhood. Interestingly,

the Court of Appeal also considered that when confronted with first

time to deviate from a particular scheme, since a precedent would

be set, careful and detailed consideration was imperative.

Coincidentally but significantly, the Developer was a freehold

owner.

12. The Appeal and the pending application are devoid of merit

and are dismissed, but with no order as to costs.

                                                  ( VIKRAMAJIT SEN )
                                                        JUDGE



                                                  ( A.K. PATHAK )
May 31, 2010                                             JUDGE
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