M/S J.S. Furnishing Co. (P) Ltd. vs Uoi & Anr.
2011 Latest Caselaw 3839 Del

            *IN THE HIGH COURT OF DELHI AT NEW DELHI
                                                Date of decision: 9th August, 2011
+                                    W.P.(C) 3637/1990
         M/S J.S. FURNISHING CO. (P) LTD.          ..... Petitioner
                        Through: Mr. Rakesh Tiku, Sr. Adv. with Mr.
                                  Vivek Ojha, Adv.
                                           Versus
         UOI                                                   ..... Respondent
                                    Through: Mr. Jatan Singh & Mr. Kunal Kahol,
                                              Advs.
                                            AND
+                                    W.P.(C) 16784/2004

         M/S J.S. FURNISHING CO. (P) LTD.            ..... Petitioner
                        Through: Mr. Rakesh Tiku, Sr. Adv. with Mr.
                                  Vivek Ojha, Adv.

                                           Versus
         UOI & ANR.                                              ..... Respondents
                                    Through:   Mr. Jatan Singh & Mr. Kunal Kahol,
                                               Advs.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.       Whether reporters of Local papers may                   Yes
         be allowed to see the judgment?

2.       To be referred to the reporter or not?                  Yes

3.       Whether the judgment should be reported                 Yes
         in the Digest?


W.P.(C)Nos.3637/1990 & 16784/2004                                         Page 1 of 11
 RAJIV SAHAI ENDLAW, J.

1. These two writ petitions concern the perpetual lease granted by the President of India of a land ad-measuring 800 sq. yds. bearing Plot No.39, Ring Road, Lajpat Nagar, Part-II, New Delhi. The said lease, vide letter dated 11th / 13th August, 1986 of the respondent Land and Development Office (L&DO) stood mutated in the name of the petitioner.

2. W.P.(C) No.3637/1990 was filed impugning the demand dated 3 rd May, 1990 of the respondent L&DO of damages, for unauthorized construction on the said land and for misuse of the construction on the said land. Notice of the said writ petition was issued.

3. The petitioner during the pendency of the said writ petition, in accordance with the policy of the respondent L&DO of conversion of lease hold right into freehold, in or about December, 1999 applied for the said conversion. W.P.(C) No.16784/2004 was filed averring that on enquiries, the officials of the respondent L&DO had orally informed that the application for freehold conversion was not being pressed for the reason of pendency of W.P.(C) No.3637/1990. The petitioner in W.P.(C) No.16784/2004 claims the relief of mandamus for conversion of the leasehold rights into freehold. Notice of the said petition was also issued.

4. The pleadings have been completed in both the writ petitions and the counsels have been heard.

5. As far as the challenge in W.P.(C) No.3637/1990 to the demand of respondent L&DO for damages for unauthorized construction and misuser is concerned, even though the senior counsel for the petitioner has contended that the damages for unauthorized construction even if leviable by the respondent L&DO can be one time only and cannot be recurring as claimed by the respondent L&DO and the counsel for the respondent L&DO has sought to urge on an interpretation of the Clauses of the Lease Deed that the respondent L&DO is entitled to claim the same but the matter is squarely covered by the Jor Bagh Association (Regd.) Vs. Union of India 112(2004) DLT 690 where a Single Judge of this Court on an interpretation of similar Clauses as in the Lease Deed in the present case held that the respondent L&DO is not empowered to levy any such damages. Though as aforesaid, the counsel for the respondent has sought to raise arguments, which it is contended were not considered in Jor Bagh Association (Regd.) (supra) but it is not deemed appropriate for coordinate bench to consider the matter and specially when an intra Court appeal against Jor Bagh Association (Regd.) is pending before the Division Bench of this Court. Similarly, the question for consideration whether the damages for unauthorized construction have to be one time or recurring, does not fall for consideration once the judgment in Jor Bagh Association

(Regd.) holds the respondent L&DO to be not entitled to levy any such damages.

6. Accordingly, W.P.(C) No.3637/1990 has to be necessarily allowed in accordance with Jor Bagh Association (Regd.).

7. The senior counsel for the petitioner has contended that once W.P.(C) No.3637/1990 is allowed, the respondent ought to be directed to consider the request of the petitioner for freehold conversion made as far back as in December, 1999. He has invited attention to the counter affidavit filed by the respondent in W.P.(C) No.16784/2004, where it has been stated that the conversion application of the petitioner was not processed owing to the pendency of W.P.(C) No.3637/1990. He has contended that even if the petitioner were to be held liable to pay the damages as claimed, as a condition for availing the freehold conversion, the same would be payable only till the year 1999 when the petitioner opted for freehold and the respondent L&DO is not entitled to claim the same for the period subsequent thereto.

8. Per contra, the counsel for the respondent L&DO has invited attention to the Policy for freehold conversion as contained in the brochure published in June, 2003 and filed by the petitioner along with W.P.(C) No.16784/2004. He has drawn attention to Clauses 13,15 & 20.3 thereof which are as under:

"13. IF PAST MISUSE AND UNAUTHORIZED CONSTRUCTION WERE TAKEN COGNIZANCE OF BY THE LESSOR HOW THESE CASES WILL BE HANDLED?

In respect of these properties where any amount earlier claimed by the lessor and not paid by the lessees will have to be paid before the application for conversion can be considered. In respect of those properties where misuse and / or unauthorized construction exists, conversion may be allowed only after recovering the misuse charges and / or damages charges, irrespective of whether earlier demanded or not.

15. WHETHER CONVERSION WILL BE GRANTED IF THERE IS A DISPUTE BETWEEN THE LESSOR AND LESSEES ABOUT PAYMENT OF CERTAIN DUES?

No, Conversion will not be granted unless any pending dispute including for payment of certain dues in respect of leasehold premises between the lessor and lessee is resolved.

20. ON WHAT GROUND THE CONVERSION APPLICATION WILL BE REJECTED?

20.3 When there is a pending litigation between the lessee and lessor."

9. He has also invited attention to the counter affidavit filed in W.P.(C) No.16784/2004, where it has been pleaded that the petitioner had earlier been paying the damages claimed for unauthorized construction and misuser till 14th July, 1988 and had also given an undertaking dated 20 th September, 1988 to remove or regularize the breaches beyond 14 th January, 1989 and to also pay the dues if the land rates are revised from 1 st April, 1987.

10. He has thus contended that the petitioner cannot claim conversion to freehold on the basis of the application made in December, 1999 and even with the allowing of the W.P.(C) No.3637/1990 and if at all eligible, shall be entitled to apply for freehold conversion now that W.P.(C) No.3637/1990 has been disposed off and which application shall be considered in accordance with the policy.

11. Per contra, the senior counsel for the petitioner has contended that the respondent as a State owes a duty to the petitioner to intimate that his application for freehold conversion made in December, 1999 was not being considered for the reason of the pendency of the earlier writ petition and could not keep the same pending. Attention is also invited to para 1 of the reply on merit in the counter affidavit in W.P.(C) No.16784/2004 and it is contended that the stand taken in the earlier paragraph, of the application having not been processed is contrary to the stand taken in the said paragraph, of the application for freehold conversion preferred by the

petitioner being without any document and a letter dated 4 th November, 2004 having been issued in this regard. It is urged that no such letter has been served on the petitioner and the respondent L&DO also along with its counter affidavit has not annexed any copy of the letter.

12. The original record brought by the official of the respondent L&DO to this Court has been perused. Though the same contains a copy of the letter dated 4th November, 2004 seeking certain documents from the petitioner but there is no proof of dispatch or service of the said letter.

13. It may be noticed that there was no interim order in W.P.(C) No.3637/1990 restraining the respondent from recovering the demand impugned therein. The question which thus arises is whether in view of the aforesaid policy, the respondent L&DO was required to process and deal with the application of the petitioner for freehold conversion.

14. The counsel for the respondent L&DO has contended that the petitioner was not entitled to freehold conversion as a matter of right and could avail of the said policy only strictly in accordance and compliance therewith and not otherwise.

15. Per contra, the senior counsel for the petitioner contends that the respondent L&DO if not accepting the application of the petitioner was required to reject the same.

16. Strong reliance is also placed on the Division Bench judgment of this Court in Union of India Vs. Vinay Kumar Agarwal 116 (2005) DLT

322. It is contended that once the Division Bench of this Court has held that the applications for freehold conversion in cases where re-entry is already effected were also to be allowed and stuck down the policy of L&DO of not considering the said applications, the application of the petitioner was certainly entitled to be considered.

17. I am in agreement with the argument that freehold conversion could not be claimed as a matter of right. The respondent L&DO had under the said policy given an option to the lessees who were otherwise to remain lessees, to convert their leasehold rights into ownership rights. Such conversion could be availed of only on the terms offered. It being the term that application for conversion shall not be entertained during the pendency of dispute and without payment of misuse charges, the petitioner without concluding the litigation and without paying the misuse charges, could not avail of freehold conversion. Even though the respondent L&DO has been held to be not entitled under terms of lease to claim such misuse charges, it could claim the same as a condition of freehold conversion. Reference may be made to Madhav Garg Vs. NDPL 129 (2006) DLT 213 (DB) and BSES Rajdhani Power Ltd. Vs. Saurashtra Color Tones Pvt. Ltd. 161 (2009) DLT 28 (FB) holding that even though the claim for electricity charges may be bad by time, it would not prevent

the electricity supply company from denying supply of electricity for the reason thereof. Similarly, merely because Jor Bagh Association (Regd.) has held L&DO to be not entitled under the lease terms to enforce payment of damages / misuse charges, would not disentitle L&DO from insisting upon payment thereof, for freehold conversion.

18. The petitioner at the time of applying in December, 1999 for freehold conversion was aware that notwithstanding the challenge made in W.P.(C) No.3637/1990, the freehold conversion could be availed of only by paying the damages demanded by the respondent L&DO and only if there was no dispute pending with the respondent L&DO. As long as the dispute with the respondent L&DO in the form of a litigation being W.P.(C) No.3637/1990 was pending, the petitioner had no right to apply for freehold conversion.

19. Once the petitioner is not found to have any right to apply, the argument that the respondent owed a duty to respond disappears. The brochure published by the respondent for freehold conversion contains not only the procedure in detail but also the Frequently Asked Questions (FAQ). The purport of the said brochure was to make the applicants aware of the circumstances in which the conversion was possible. A reading of the said brochure ought to have intimated the petitioner that till the W.P.(C) No.3637/1990 was pending, it was not entitled to apply for freehold conversion.

20. As far as the reference to the judgment in Vinay Kumar Agarwal (supra) is concerned, even though the counsel for the respondent L&DO has contended that the Apex Court in the SLP preferred thereagainst has left the question open and that the said question is alive in Union of India Vs. Anu Mehra but irrespective of the same, I am of the opinion that Vinay Kumar Agarwal was not concerned with the controversy as has arisen before this Court. In Vinay Kumar Agarwal the policy of the respondent L&DO of denying freehold conversion to lessees whose lease had been re-entered was struck down for the reason of the same being discriminatory inasmuch as the transferees from such lessees were entitled to such freehold conversion. Moreover, in Vinay Kumar Agarwal the re- entry though effected in 1970 was not the subject matter of any litigation as the dispute between the petitioner and the respondent in the present case was, in W.P.(C) No.3637/1990. Moreover, this Court in Vinay Kumar Agarwal was concerned with the conversion policy of 1992, while the petitioner herein had applied under the conversion policy of 2003.

21. Thus W.P.(C) No.16784/2004 claiming relief of directing the respondent L&DO to consider the application for freehold conversion made in December, 1999 cannot be granted inasmuch as the same was not entertainable in terms of the policy. The senior counsel for the petitioner has contended that there was no rejection of the application made in December, 1999. Even if that be so, if the petitioner is not found entitled

to the conversion in accordance with the policy under which the petitioner had applied, the petitioner cannot be granted the mandamus sought.

22. Accordingly, W.P.(C) No.3637/1990 is allowed and the demand dated 3rd May, 1990 is set aside and W.P.(C) No.16784/2004 is dismissed.

No order as to costs.

RAJIV SAHAI ENDLAW (JUDGE) AUGUST 09, 2011 „gsr‟