Delhi Development Authority vs Modern Public School Education ...
2011 Latest Caselaw 1403 Del

*             IN THE HIGH COURT OF DELHI AT NEW DELHI

+              LETTERS PATENT APPEAL NO. 487 OF 2010

                                    Reserved on : 31st January, 2011.
%                                Date of Decision : 10th March, 2011.

DELHI DEVELOPMENT AUTHORITY                 .... Appellant
             Through Ms. Sangeeta Chandra, Advocate.

                                VERSUS

MODERN PUBLIC SCHOOL EDUCATION SOCIETY &
ANOTHER                               .....Respondents

Through Mr. Harish Malhotra, Sr. Advocate with Mr. Tanuj Khurana, Advocate for respondent No. 1.

Mr. Sauarb Khanna, Advocate for Mr. Gaurang Kanth, Advocate for respondent No. 2-MCD.

CORAM:

HON'BLE MR. JUSTICE DIPAK MISRA, THE CHIEF JUSTICE HON'BLE MR. JUSTICE SANJIV KHANNA

1. Whether Reporters of local papers may be allowed to see the judgment?

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

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

SANJIV KHANNA, J.:

Delhi Development Authority (DDA) has filed the present

intra-Court appeal against the judgment dated 1st December,

2009 allowing Writ Petition (Civil) No. 9321/2006 filed by Modern

Public School Education, the respondent herein. The appellant

has been directed to issue No Objection Certificate (NOC) to the

Municipal Corporation of Delhi (MCD) to permit them to proceed

with sanction of building plans in respect of land measuring 3.97

L.P.A. No. 487 of 2010 Page 1 acres at block-B, between pockets L&P, Paschim Salimar Bagh,

New Delhi (Land, for short). The respondent has been directed

to deposit composition fee for non-construction of Rs.9,12,599/-

together with interest @ 6% per annum from 2003 till the date of

judgment. It has been further held that the directions were

subject to the final order which may be passed in the

proceedings arising out of the charge sheet filed by the Central

Bureau of Investigation (CBI) and to this extent the respondent

would be bound by the statements made by their counsel in the

Court.

2. The appellant had allotted leasehold rights in respect of

the land for establishing a senior secondary school and an

indenture in form of the perpetual lease deed was subsequently

executed on 4th January, 2002. The said indenture records that

the land was demised to the respondent as a lessee on 26th

August, 1985. The lease deed stipulated as under:-

"(4) The lessee shall, within a period of two years from the 26th day of August one thousands nine hundred and eighty five (and the time so specified shall be of the essence of the contract) after obtaining sanction to the building plan, with necessary designs, plans and specification land and complete in a substantial and workmanlike manner a building for Sr. Sec. School with the requisite and proper walls, sewers and drain and other conveniences in accordance with the

L.P.A. No. 487 of 2010 Page 2 sanctioned building plan and to the satisfaction of such municipal or other authority."

3. The admitted position is that no building has been

constructed on the said land and there is violation of the

aforesaid clause 4. The admitted position is that the DDA had

granted extension of time on 9th October, 2001 to raise a

construction upto 30th June, 2002 on payment of composition

fee. The respondent had made a representation for waiver of the

composition fee but ultimately had deposited the amount of

Rs.8,57,053/- towards composition fee for extension of time upto

30th June, 2002. The respondent did not construct within this

extended period upto 30th June, 2002.

4. On 18th November, 2002, the appellant issued a show

cause notice to the respondent why action should not be taken

for cancellation of the lease for not raising construction in

violation of clause 4. On 8th January, 2003, a reply to the show

cause notice was submitted by the respondent with a prayer for

extension of time for another period of two years. On 6th

February, 2003, the respondent was granted extension of time

upto 31st December, 2004 upon payment of composition fee of

Rs.13,57,759/-. By letter dated 6th February, 2003 the demand

of composition fee was reduced to Rs.9,12,599/-.

L.P.A. No. 487 of 2010 Page 3

5. On 10th February, 2003, the respondent made a

representation to DDA for waiver of composition fee stating, inter

alia, that in cases of schools the appellant had been taking

lenient view when construction was not raised. The appellant by

their communication dated 28th February, 2003 informed the

respondent that the composition fee amounting to Rs.9,12,599/-

had been waived. Thereafter, the respondent applied for

sanction of building plans with the MCD on 16th September,

2003. MCD by their letter dated 8th October, 2003 requested

DDA to grant NOC for processing the case. DDA vide their

communication dated 13th November, 2003 refused to grant

NOC and intimated to the MCD that the original allotment file

was in the custody of the CBI.

6. After investigation, CBI has filed a charge sheet before

Special Judge, CBI. The allegations in the charge sheet are that

Mr. Subhash Sharma the then Vice-Chairman, DDA had entered

into criminal conspiracy during the period November, 2002 to

March, 2003 with the co-accused Jagdish Chander, Director

(Land), DDA, Dharambir Khattar, a private person, Ashok

Kumar, an ex-Private Secretary to the Vice-Chairman, DDA and

Amrit Lal Kapoor, Director of the respondent society to show

undue favour in the matter, not to cancel the lease, grant

L.P.A. No. 487 of 2010 Page 4 extension of period of construction and by reducing the

composition fee from Rs.13,57,679/- to Rs.9,12,599/- which was

subsequently waived, against pecuniary advantage of

Rs.2,50,000/-. Charges were framed on 20th May, 2008 by the

Special Judge and the said persons are facing prosecution.

7. In the light of the aforesaid facts, it is to be examined

whether the directions given in the impugned judgment dated 1st

December, 2009 can be sustained or should be upset/reversed.

One additional factor which has to be taken into consideration is

the guidelines or the procedure for imposition of composition fee

and calculation of composition fee in cases of late construction.

The said guidelines were directed to be produced before us and

have been placed on record.

8. The contention of the learned counsel for the appellant

was that it is not mandatory or a right of any allottee to claim

extension of time for construction upto 20 years on payment of

composition fee and on the other hand the authorities have

discretion to extend time upto 20 years but on satisfaction that

there are good reasons, why the construction was not

commenced/completed. It is pointed out that in some cases,

leases have been cancelled before expiry of 20 years as

L.P.A. No. 487 of 2010 Page 5 construction was not carried out. However, it appears that in the

two such cases the matter is sub-judice.

9. In the present case, as noticed above show cause notice

dated 18th November, 2002 was issued by the appellant to the

respondent stating why action should not be taken for

cancellation of the lease, due to non-construction. On 8th

January, 2003, a reply was submitted asking for further

extension for a period of two years. On 6th February, 2003,

extension was granted upto 31st December, 2004 on payment of

composition fee of Rs. 13,57,769/- which was subsequently

reduced to Rs. 9,12,599/-. By communication dated 28th

February, 2003 the composition fee was entirely waived. Copy

of the charge framed by the Sub-Judge on 20th May, 2008

placed on record reads as under:-

" That you A-1 Subhash Sharma, being a public servant while working as Vice Chairman, DDA, Delhi, entered into a criminal conspiracy during the period November 2002 to March, 2003 at Delhi with your co-accused A-2 Jagdish Chander Director (Lands), DDA, A-3 Dharambir Khattar (private person), A-4, Ashok Kapoor the Ex. PS of Vice Chairman, DDA and A-5, Amrit Lal Kapoor (private person) and in furtherance of the said criminal conspiracy, A-5 Amrit Lal Kapoor Director of Modern Public School Educational Society, Shalimar Bagh, New Delhi was shown undue favour in the matter not to cancel the lease relating to extension of period for construction of building

L.P.A. No. 487 of 2010 Page 6 on the vacant land of about 4 acres and by reducing composition fee from Rs.13,57,769/- to Rs.9,12,599/- which was subsequently waived off against a pecuniary advantage of Rs.2.50 lakhs which was obtained through A-3 Dharambir Khattar who was acting as a conduit between you all public servants and A-5 Amrit Lal Kapoor and the favour was done by you all by abusing your official position and by corrupt and illegal means knowing fully well that previously a show cause notice was issued to the Modern School Educational Society for cancellation of lease and in furtherance of the said criminal conspiracy a favourable note for waiving the composition fee was put up by Sh. CU Kumar, Dy. Director Lands, DDA on the directions of you A-2 Jagdish Chander which was approved by you A-1 Subhash Sharma and extension of period of construction was also approved by you A-1 Subhash Sharma and the letters of both the approvals were collected and delivered by you A-4 Ashok Kapoor to A-5 Amrit Lal Kapoor and also you A-4 Ashok Kapoor collected the settled amount of Rs.2.50 lakhs from A-5 Amrit Lal Kapoor and this amount was shared by you all the public servants and A-3 Dharambir Khattar and thereby you all committed offences under Section 120-B IPC read with Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1938 and within the cognizance of this Court.

And I hereby direct that you all be tried by this court on the above said charge."

10. A reading of the said charge shows that there are

allegations that there was no good ground for extension of time

for construction and there was criminal conspiracy as a result of

which the time was extended first on payment of composition fee

L.P.A. No. 487 of 2010 Page 7 of Rs.13,57,769/-, which was subsequently reduced to

Rs.9,12,599/- and then waived. It is alleged that this was done

for pecuniary advantage/bribe of Rs.2,50,000/-. Amrit Lal

Kapoor, Director of the respondent society is also facing

prosecution for having indulged and being a co-conspirator in

the said offence. Thus, the extension of time, first with

composition fee and then its waiver itself are subject matter of

the charge sheet and the criminal case. Learned counsel for the

appellant is right in her contention that the extension granted on

6th February, 2003 itself is subject matter of the charge sheet

and the criminal prosecution. Therefore, it is not correct on the

part of the private respondent to state that they were granted

extension of time to construct upto 31st December, 2004 on

payment of composition fee and the said decision is binding on

the appellant. As per the charge sheet which is pending

consideration, the decision to extend the time for construction

upto 31st December, 2004, itself was a result of a conspiracy

which is subject matter of the criminal trial.

11. The facts of the present case are rather peculiar. Learned

single Judge while allowing the writ petition has held that the

respondent, will be bound by the decision of the criminal court,

but they should be allowed to construct on payment of

L.P.A. No. 487 of 2010 Page 8 composition fee of Rs.9,12,599/- along with 6% interest from

2003 till the date of judgment. The criminal court obviously

cannot decide whether or not extension of time should be

granted. This cannot be a subject matter of a criminal trial and

the judgment, which would be passed by the criminal court.

Further, once construction is carried out, it will be difficult or

rather impossible for the appellant to get back the plot, even if

the criminal conspiracy is established and there is conviction. It

is obvious that in case Mr. Amrit Lal Kapur, Director of the

respondent society was involved in the conspiracy and had paid

bribe of Rs.2,50,000/- for extension of period of construction or

for waiver of composition fee, the respondent society should not

be granted extension of time and the lease hold rights should be

forfeited and cancelled for failure to construct in violation of

clause (4). The respondent society cannot be allowed to profit

because of their wrong. Further, the trial is going to take time,

maybe years before it is decided. To allow status quo to

continue and keep the matter hanging will also result in failure of

justice and is not a desired option.

12. Clause (iii) at page 17 of the said brochure/guidelines for

extension read as under:-

L.P.A. No. 487 of 2010 Page 9 "In partial modification of the instructions issued on 21.7.88, the Lt. Governor is pleased to revise the following guidelines for recovery of composition fee for extension of period of construction on plots and other allied matter.

1. (a) x x x x x x

(i) x x x x x x

(ii) x x x x x x

(iii) Beyond 10th year the name shall invariably removed in exceptional cases V.C. may grant the extension on payment of usual penalty."

13. Thus extension of time after 10 years is not a formality or

simply a matter of calculation of composition fee and on

payment thereof extension of time for construction a foregone

conclusion. Factual justification in each individual case has to be

examined on merits and then a decision has to be taken. It is not

mandatory to extend time for construction, even if the allottee is

ready and willing to pay the composition fee. The said fee has to

be paid but when construction does not commence even after

10 years, the allottee has to justify and explain the delay. Longer

the delay, deeper the scrutiny is required and necessary.

Justification has to be established.

14. Before the learned single Judge, DDA was asked to

constitute a Committee to examine the case of the respondent

for extension. The case was examined by the committee and an

affidavit was filed before the single Judge, the relevant portion of

which reads as under:-

L.P.A. No. 487 of 2010                                           Page 10
                "3.........
                       The matter was taken up for

consideration in the meeting of the designated committee on 28.11.08 under the Chairmanship of the PC, DDA where the C.V.O., C.L.A. and C.L.D. were also present. The Committee deliberated the issue at length and observed that the extension of time to the petitioner from 1.1.03 to 31.12.2004 was by itself irregular. The CBI was investigating the matter and Mr. A.L. Kapoor through whom the petition has been charge-sheeted by the CBI.

It was opined upon consideration that when the grant of extension of time on the previous occasion itself was not considered regular, the request of the petitioner society for extension of time beyond 31.12.2004 could not be considered at this stage.

After due deliberations, the Committee concluded that since the CBI was investigating the matter and the secretary of the petitioner society had been charge-sheeted it would not be advisable to grant extension at this stage. Thus, the request of the petitioner for extension of time beyond 31.12.2004 could not be considered for the said reasons.

The said decision has been approved by the Competent Authority being the Vice-Chairman, DDA on 22.12.08."

15. It is, therefore, clear from the aforesaid that the appellant-

DDA had refused to extend the time upto 31st December, 2004.

The reason given by them is that this could not be considered

now in 2008.

L.P.A. No. 487 of 2010 Page 11

16. In view of the aforesaid facts, we have examined the

reasons and grounds given by the respondent for extension of

time. As noticed above, it is not doubted that the possession of

the land was given to the respondent on 26th August, 1985. They

were also granted extension of time upto 30th June, 2002 on

payment of composition fee of Rs.8,57,053/- vide letter dated 9th

October, 2001. Thus, they were given 18 years to construct a

building on the land which was allotted for construction of a

senior secondary school. By no stretch, this is a small period.

17. The respondent after the last extension period had expired

on 30th June, 2002, waited till 21st November, 2002, when they

made an application for extension of time. This application was

moved only when the appellant-DDA had written the letter dated

18th November, 2002, why the respondent society had not

constructed the building and the site/plot was being used as a

play ground. The respondent society in their letter dated 21st

November, 2002 had stated:-

"We could not shift our Senior Secondary School at the allotted site due to some financial constraints inter alia beyond our control. It is also relevant to point out that we have got our Lease Deed of the subject site executed in the Registrar's office only on 01.01.2002 and we are in the process of getting the building plans sanctioned from the MCD. The DDA has also

L.P.A. No. 487 of 2010 Page 12 granted extension of time for construction of building upto 30.06.2002 (Copy enclosed).

You will be very kindly aware that without proper Lease Deed, the MCD will not entertain our building plans for sanction. Now, the building plans are being sent to the MCD for their approval.

We may point out that we have made payments of all our dues to DDA upto date.

We may also point out that out of 3.97 acres allotted for a Senior Secondary School, 1.97 acres were allotted for play ground of a Senior Secondary School and the same is being rightly used for that purpose. Our only fault is that we have not been able to raise a Senior Secondary School building on the remaining 2 acre site and shift the Senior Secondary sections above primary to the proposed/Senior Secondary building. We are now taking frantic steps to remedy the wrong as aforesaid."

18. The contention that the lease deed was executed only on

4th January, 2002 is inconsequential and not relevant. Once

possession of the land is given to the lessee/allottee, he has to

carry out construction after getting NOC. The delay in executing

lease deed did not prevent the respondent from construction. It

is clear that no reason or ground was given in their letter for

extension of time. Subsequently by another letter dated 8th

January, 2003, the respondent society had replied to the show

cause notice dated 2nd January, 2003 and had submitted:-

L.P.A. No. 487 of 2010 Page 13 "2. That a plot of subject land measuring 3.977 acres was allotted to this school society and time was given to raise the building on the 2 acres of the said plot of the land upto 30.06.2002. 1.977 acres was given to us for play ground out of the said site.

3. That a Senior Secondary School under this society being Modern Public School Education Society is running on the adjoining primary school site and we are required to shift secondary and senior secondary sections above the primary school to the building to be built on the said allotted plot of land.

4. That we have already and enclosed the allotted site by a designer boundary wall 8 feet height and further put an iron railing of 3 feet height on the piece of site reserved for play ground.

5. That the play ground area of the said site has further been developed by providing for :

i) One Football ground

ii) One Hockey ground

iii) One Handball court

iv) Two Basket concrete court

v) Two Volleyball court

vi) Four Kho-Kho courts &

vii)A gymnasium for the students

6. That for certain financial and other constraints beyond our control we could not raise the building on the allotted site within the allotted time.

7. That we are now dead set and willing to raise a quick building on the allotted site."

19. The aforesaid reasons given cannot be regarded as

grounds why building had not been constructed. By no stretch,

these can be considered as justification. In the writ petition filed

L.P.A. No. 487 of 2010 Page 14 on 9th March, 2006, the respondent had given the following

grounds why the construction could not be raised:-

"6. That while the petitioner (i.e. the respondent in the present appeal) was in the process of getting the building plans sanctioned, the petitioner had suffered a huge financial setback for the reasons.

a. The petitioner had lost their case against the Employees Provident Fund Authorities and, thus, a huge demand of about Rs.1.50 Crores was raised against them.

b. In view of the recommendations of 5th pay commission and implementation thereof, the petitioner was burdened with the additional salary.

c. In view of the Judgment of Hon'ble Supreme Court of India, the petitioner had purchased three CNG buses.

d. The petitioner was also required to deposit a sum of Rs.4.00 Lac plus interest thereon with the Delhi Development Authority in view of the revised land rates.

For the aforesaid reasons, the petitioner could not proceed for the sanction of the building plans and also could not raise the construction in time."

20. The reasons mentioned in the writ petition cannot be

regarded as cogent and justifiable grounds to extend time for

construction beyond 18 years. In the first reason i.e. provident

fund dues of Rs.1.5 Crores, no dates have been mentioned

when the amount became due and was paid. The same reason

was given in the letter dated 19th September, 2001, when the

L.P.A. No. 487 of 2010 Page 15 respondent had applied for extension of time, which was granted

upto 30th June, 2002. The second reason is equally farcical. 5th

Pay Commission was applicable with effect from 1996. Pursuant

to implementation of the 5th Pay Commission, the school fees

were also hiked and the said ground can hardly justify extension

of time in 2002-2003. Similarly, third reason i.e. purchase of

buses was mentioned in the earlier letter dated 19th September,

2001. More than 8 years old buses were weeded out in terms of

the order passed by the Supreme Court and replaced with 3

CNG buses. The fourth reason given above is that the

respondent had to deposit Rs. 4,00,000/- plus interest towards

additional cost on account of revised land rates. This ground

was also mentioned in the earlier letter dated 19th September,

2001. The respondent vide letter dated 9th Oct.,2001 was

granted extension of time upto 30th June,2002 on payment of

composition fee of Rs. 8,57,053/-, but no construction was

undertaken. It is not the case of the respondent that any

construction was started. These four reasons do not furnish any

ground or cause to the respondent to repeatedly apply and get

extension of time whenever they want as per their wishes.

21. The respondent claims that it is a charitable society. The

land has been allotted to them on the basis of said assert, at pre

L.P.A. No. 487 of 2010 Page 16 determined fixed rate and not at the market rate for furtherance

and to enable them to construct a senior secondary school and

spread education/educate children. Convergence of the State

largesse on the respondent was/is coupled with the obligation

and duty to serve public good and purpose. We cannot forget

and be impervious to the objective and purpose behind the said

allotment. There was/ is a shortage of private schools and

parents of children face tough time and harassment. Developed

land in Delhi is scarce. Even if the government or the appellant

want that more schools should be constructed, so that the

demand and supply mismatch is reduced, land cannot be

allotted for schools, because it is not available. The whole object

and purpose gets defeated and nullified in case a school

building is not constructed even for 18 years. In these

circumstances to allow extension of time for construction even

after 18 years of allotment, on mere asking without any

justification and good cause, will be contrary to the larger public

interest. The present case cannot be compared to cases of

allotment of a residential plot to an individual for benefit of the

said person or her family. The allotment in the present cases is

made for the benefit of the society and the community. Any

L.P.A. No. 487 of 2010 Page 17 leniency or latitude to the respondent will defeat the said social

purpose and object.

22. In view of the aforesaid reasoning, we allow the present

appeal and set aside the impugned judgment dated 1st

December, 2009 passed in W.P.(C) 9321/2006. The said writ

petition will be treated as dismissed. In the facts of the case

there will be no order as to the costs.

(SANJIV KHANNA) JUDGE

(DIPAK MISRA) CHIEF JUSTICE

MARCH 10th, 2011 VKR

L.P.A. No. 487 of 2010 Page 18