Delhi Development Authority vs Hans Raj Batheja
2011 Latest Caselaw 1859 Del

                                           REPORTABLE
*           IN THE HIGH COURT OF DELHI AT NEW DELHI

+                        LPA No. 121 of 2010

                         Judgment reserved on: 7th February, 2011
%                        Judgment delivered on: 30th March, 2011.


DELHI DEVELOPMENT AUTHORITY                ....Appellant
             Through Mr. Ajay Verma, Advocate.

                   VERSUS

HANS RAJ BATHEJA                                 .....Respondent
             Through           Mr. Neeraj Jain, Advocate.

CORAM:
HON'BLE 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               Yes
    in the Digest ?

SANJIV KHANNA, J.

The appellant, Delhi Development Authority by the present

Letters Patent Appeal has impugned the order dated 19 th November,

2009 passed in W.P.(C) No.3631/2008, Hans Raj Bhateja Vs. Delhi

Development Authority and Another. By the impugned order, the

learned single Judge has quashed the demand for misuse charges and

interest as well as the show cause notice dated 15th June, 2001. It has

been further directed that on the respondent herein paying Rs.

6,37,123.73/- (Rupees Six Lakh Thirty Seven Thousand One Hundred

Twenty Three and Seventy Three paise only) towards misuse charges

to the appellant, the respondent‟s application for conversion of the

property No.9, Saini Enclave, Delhi-110092 (the property, for short)

from lease hold to free hold shall be considered.

2. The property was originally allotted to one Mr. Tara Singh. By

application dated 16th June, 1994, the respondent applied for

conversion of the property from lease hold to free hold and had

submitted papers including power of attorney executed by Mr. Tara

Singh. The respondent on self-assessment basis had deposited

conversion charges of Rs.43,337/- (Rupees Forty Three Thousand

Three Hundred Thirty Seven only) and another amount of Rs.10,561/-

(Rupees Ten Thousand Five Hundred and Sixty One only) towards

composition fee was deposited on 30th December, 1994 pursuant to the

letter dated 20th December, 1994 written by the appellant. By

communication dated 7th March, 1995, the respondent received

unstamped and unexecuted conveyance deed with the direction to get it

stamped from the Collector of Stamps. It is admitted that the

respondent was required to submit the stamped conveyance deed with

the appellant after adjudication by the Collector of Stamps for

execution of the sale/conveyance deed. The respondent waited for

about six years and got the conveyance deed stamped on payment of

Rs.5,655/- (Rupees Five Thousand Six Hundred and Fifty Five only)

and submitted the said document vide receipt dated 30th October, 2001.

3. During this period, the appellant issued show cause notice dated

15th June, 2001, wherein it was alleged that contrary to the terms and

conditions of the sub-lease deed, the property was being used for the

sale of bath fittings, tiles etc. i.e., as a showroom or a shop. The

respondent, by letter dated 18th July, 2001 protested and stated that the

allegations were false and baseless and the respondent and his family

members were residing in the premises and no such activity, as stated

in the notice was being carried out and there was no nuisance and

disturbance to the neighbours. It may be noticed here that in one of the

columns of the form for conversion of the property from lease hold to

free hold, the respondent-applicant was required to state whether the

property was being used for residential purpose i.e. the specified

purpose mentioned in the lease deed. The respondent had stated that

the property was being used for residential purpose.

4. As per the case of the appellant, Deputy Director (Enforcement)

vide his letter dated 26th September, 1996 had informed that the

property was being used for other purposes, than the permissible

residential purpose. Junior Engineer (CS) vide his report dated 18 th

May, 2001 informed that the premises was being misused for

commercial purposes under the name and style of „Bath Jewellery‟,

„NITCO Tiles‟, „Hans Bath Fittings‟ and „Orient Tiles‟ and it was in

these circumstances, the show cause notice dated 15 th June, 2001 was

issued for misuse of the property.

5. There is merit in the contention of the appellant that the

respondent had deliberately delayed submission of papers i.e. the

stamped conveyance deed, which was sent by the appellant to the

respondent for the purpose of valuation and stamping by their letter

dated 7th May, 1995. The conveyance deed was submitted after six

years on 30th October, 2001. There is no plausible cause or explanation

for this delay as only stamp duty of Rs.5,655/- (Rupees Five Thousand

Six Hundred and Fifty Five only) was payable. The only plausible

explanation for the same is that the Deputy Director (Enforcement) by

his letter dated 26th September, 1996 had informed that the property

was being used for other purposes than the residential purposes and,

therefore, once the stamped conveyance deed was presented, this

aspect would be examined. The stamped conveyance deed as is

apparent was filed after six years on 30th October, 2001 i.e., after the

show cause notice dated 15th June, 2001 was issued.

6. The appellant tried to inspect the property once again on 21st

December, 2001, but no inspection was allowed by the son of the

respondent. The property was revisited on 4th January, 2002, when the

respondent was present and at that time also it was found that a shop

„Bath Jewellery‟ was still continuing on the ground floor. The shop

area was measured as 157.4 sq. meters. Inspection of the basement was

not permitted as it was stated that keys were not available with the

respondent. The first floor was being used for residential purpose. It

may be noted that the respondent had informed the appellant by his

letter dated 21st January, 2002 that the field staff of the appellant DDA

had visited the premises in his absence. This letter obviously has to be

taken with a pinch of salt and does not deserve and merit acceptance.

The allegation of misuse should be accepted.

7. The fact that the property was being misused is also affirmed by

the fact that the prosecution was launched against the respondent under

Section 14 of the Delhi Development Authority Act, 1956 for violation

of the Zonal Plan/Master Plan. The respondent was convicted and a

fine of Rs.4,000/- was imposed and paid by the respondent on 6th May,

1998. The contention of the respondent is that he had stopped the

misuse after paying fine of Rs. 4,000/- (Rupees Four Thousand only)

on 6th May, 1998. We are not inclined to accept the said statement and

contention. No such contention is raised or stated in the letter, which

was written to the DDA in July, 2001 after receipt of notice dated 15 th

June, 2001. Thereafter, there is another inspection report of the Junior

Engineer (CS) dated 18th May, 2001 as well as the inspection report

dated 4th January, 2002. The appellant was not allowed to inspect the

property on 21st December, 2001.

8. Liability to pay misuse charges in view of the aforesaid facts

cannot be countenanced. The question, which now arises for

consideration, is the period for which misuse charges are leviable and

the quantum thereof. The area under misuse has been calculated and

computed as 157.46 sq. meters. This has been calculated on the basis

of the site inspection on 4th January, 2002. There is no ground or basis

why this calculation should be disregarded and should not be accepted.

The date of closure of misuse as taken by the DDA is 24th April, 2003

and on this basis it is stated as per the policy, a demand of Rs.

34,57,522/- (Rupees Thirty Four Lakh Fifty Seven Thousand Five

Hundred and Twenty Two only) was raised by the respondent vide

letter dated 17th August, 2005, which was subsequently revised vide

letter dated 20th February, 2008 to Rs.47,32,483/- (Rupees Forty Seven

Lakh Thirty Two Thousand Four Hundred and Eighty Three only). As

noticed above, the learned single Judge has reduced the said amount to

Rs. 6,37,123.73/- (Rupees Six Lakh Thirty Seven Thousand One

Hundred Twenty Three and Seventy Three paise only). This brings us

to the core issue, i.e., which a particular policy of the appellant is

applicable and why should it be applied.

9. Policies/guidelines applicable/framed by the appellant have

undergone repeated and frequent changes. Experimentation and hit and

trial method are sometimes necessary and this may bring about change

of policy/guidelines. At the same time, consistency, certainty and

uniformity are recognized principles of good governance and are

checks on arbitrariness and discrimination.

10. The first policy is dated 28th June, 1999. Clause-6 of the policy

decision dated 28th June, 1999 reads as under:-

"(6) Misuse and Unauthorised Construction It has been decided that unauthorised construction or misuse of the building constructed on leased premises ought to be taken care of by NDMC/MCD/DDA, etc. under their laws/regulations. Accordingly, the lease administering authorities may permit conversion of all leased properties irrespective of any building violations or use violations that may exist. In view of the large scale misuse of residential premises and unauthorized construction, DDA and local bodies would take coordinated action to deal with the situation effectively.

2. In view of the above, lease administering authorities are requested to make all efforts to clear the pending cases within the prescribed period of 3 months and take effective steps to deal with the fresh applications that may be received in future. Special drives may be launched to dispose of applications for freehold conversion. The lease administering authorities are requested to give due publicity to the scheme.

3. It is further clarified that these orders will have prospective effect and the cases already decided will not be re-opened."

11. Thus as per this policy nothing was payable but the appellant

was required to take effective steps to stop misuse. On 26th June, 2001,

another circular was issued by the appellant dealing with the misuse.

The said circular reads as under:-

                   "No.F.4(43)99.Coordn.        Dated 26.6.2001



                                 CIRCULAR

            In      partial     modification     of      Circular
            No.F.4(43)99/Coordn./L.D.      dt.   3.2.2000     the

clarification to the para No. 3 of the Circular No. F.4(43)99/Coord./L.D. dated 15.7.99 is as follows:

1. All cases of conversion where the past misuse/unauthorized construction was reported or the misuse is continuing are to be processed for conversion.

2. The misuse charges would be payable for the period of misuse from the date of direction of misuse till the date of vacation of misuse or up to 28.6.1999 whichever is earlier.

3. All the applications for conversion which had been rejected on account of misuse/unauthorized construction after 28.6.1999 shall be reopened and processed for conversion after recovering misuse charges as per para (2), if applicable.

4. In cases where conversion applications were received and due to continuing misuse/unauthorised construction leases were determined, all such cases would be restored and conversion allowed after recovering misuse charges as per para (2) if applicable. No restoration charges would be recoverable.

5. Where the conversion has been allowed and misuse/unauthorized construction still continuing the matter shall be referred to the concerned Enforcement Agency for further necessary action.

6. Cases wherein the conversion has already been allowed, misuse charge already paid shall not be reopened.

This issues with the approval of Vice Chairman, DDA."

12. Subsequently, another circular dated 11th August, 2003 was

issued, which for the sake of convenience is reproduced below:-

"CIRCULAR

The issue of levy of misuse charges was discussed during the course of meeting held in the chamber of Vice Chairman DDA on 17.7.2003 and following decisions were taken.

a) Misuse charges shall henceforth be levied up to date or actual date of closure, whichever is earlier. In such cases in which the lessee GPA has applied for conversion of the property, the misuse charges shall be levied up to the date of receipt of complete application for conversion along with all annexure and documents. It is further clarified that misuse charges will be levied up to the date of receipt of last installment or up to the date of closure whichever is earlier in those cases where it has been preferred by the lessee/GPA to deposit conversion charges in installments.

b) Generally the misuse charges are levied from the date of detection as per the survey report/site report etc. However, in such cases where any proof indicating the misuse of property from an earlier date is available misuse charges will be charged from

such earlier date, irrespective of actual date of detection.

c) The demand notice for raising the demand of misuse charges will specifically contain the condition that "if payment is not received within 30 days of issue of said demand letter the outstanding amount will attract interest @ 12.5% p.a.

d) The decision as mentioned above will not be applicable to all such cases where the payment on account of misuse charges pursuant to application for conversion has been received by 17.7.03. All other cases where payment has not been received, revised demand on account of misuse charges may be raised."

13. Yet another circular dated 9th March, 2007, the circular dated

11th August, 2003 was modified and it was directed as under:-

"Dated: 9/3/07 CIRCULAR In partial modification of earlier circular of even No.89 dt. 11.8.03, 152 dt. 18.12.03 and circular bearing No.PS/Dir.(RL)/LD/04/248 dt. 4.6.04, the Lt. Governor, Delhi has been pleased to approve as under:-

i) For the conversion applications received upto 31.12.06, complete in all respect, misuse charges shall be recovered upto 31.12.06 or closure of misuse whichever is earlier.

ii) For the conversion applications complete in all respect received after 31.12.06, in cases of continued misuse, the misuse charges shall be recovered up to the date of receipt of conversion application.

2. The cases in which misuse charges as per circular dt. 11.8.03, 18.12.03 & 4.6.04 have already been approved by the Competent Authority and demand raised shall not be re-opened.

Other terms and conditions or earlier circulars dt. 11.8.03, 18.12.03 shall remain the same."

14. As stated above the question, which arises for consideration, is

that which of the circular is applicable in the present case. Clause 6 of

the circulars dated 28th June, 1999 stipulated that the lease

administering authorities i.e., the DDA should convert all leased

properties irrespective of any building violations or use violations.

However, this circular does not prescribe or mention about the misuse

charges. In any case, we do not think that the respondent is entitled to

benefit of this circular as he had submitted the stamped conveyance

deed on 6th October, 2001 after the circular dated 26th June, 2001

modifying the earlier policy dated 28th June, 1999 was issued. As per

this circular, the misuse charges were payable till the vacation of

misuse or up to 28th June, 1999, whichever was earlier. This circular

stipulated that all applications for conversion, which had been rejected

on account of misuse/unauthorized construction after 28.6.1999 shall

be reopened and processed for conversion after recovering misuse

charges as per clause 2, if applicable. Clause 5 of the said circular

further stipulated that where application for conversion has been

allowed and misuse/unauthorized construction still continues, the

matter shall be referred to the concerned Enforcement Agency for

further necessary action.

15. Clause (d) of the circular dated 17th July, 2003 clarifies that the

said circular would be applicable to all pending cases except those

cases where payment on account of misuse charges pursuant to an

application for conversion was received by 17th July, 2003. In this

manner the circular dated 11th August, 2003 was made applicable to all

pending applications. Clause (a) states that the misuse charges would

be levied "up to date" or the actual date of closure, whichever was

earlier. The words „up to date‟ were explained in the second part of the

clause (a), as the date on which the application for conversion by the

lessee or the general power of attorney holder complete in all respects

with complete annexures and documents was received. It is further

clarified in the said circular that misuse charges would be levied up to

the date of receipt of last installment or up to the date of closure,

whichever was earlier.

16. In the present case, the payment towards conversion charges

including the composition fee applicable as in cases of power of

attorney transactions was made on 20th December, 1994. Thereafter,

notice along with conveyance deed was sent to the respondent on 7th

March, 1995 with a direction to get it stamped from the Collector of

Stamps. The aforesaid exercise was required to be completed within 45

days, but the respondent had deposited the original papers after getting

the conveyance deed stamped only on 6th October, 2001. We are, in

these circumstances, inclined to hold that the date when the respondent

had submitted the conveyance deed after stamping should be treated as

the date on which the complete application for conversion was filed.

The date on which the respondent had made the payment or had

received the copy of the conveyance deed for stamping should be

ignored and should not be taken as the relevant point. The gap between

the date on which the full payment was made i.e. 20th December, 1994

and when the notice for conveyance deed for stamping was sent on 7th

March, 1995 and the date on which the stamped conveyance deed was

deposited i.e. 30th October, 2001 is substantial.

17. When the respondent had submitted the stamped conveyance

deed, the circular dated 26th June, 2001 was in force and as per the said

circular, misuse charges could be calculated up to 26th August, 1999 or

up to the date of vacation of misuse, whichever was earlier. As per the

appellant, the misuse was continuing on the said date when conveyance

deed after stamping by Collector of Stamps was deposited. Nothing

prevented the appellant from computing the misuse charges in terms of

the circular dated 26th June, 2001. The aforesaid circular dated 26th

June, 2001 continued and ruled in the field, till the new circular dated

11th August, 2003 was issued. The time gap between submission of

papers i.e. the stamped conveyance deed on 30th October, 2001 and

11th August, 2003 or the date mentioned therein 17th July, 2003 is

substantially long and there is a gap of nearly 20 months. Nothing

stopped the appellant DDA from raising the demand in terms of the

circular dated 26th June, 2001 during this period. Appellant has not

explained this delay. The last inspection was on 4th January, 2002. The

circular dated 26th June, 2001 even applied to the cases which had been

closed and the applications had been rejected. For the same reasons the

2007 circular will not be applicable. We have applied principles of

equity and fair play to arrive at the aforesaid conclusion. Conduct of

the both sides has been balanced. While the respondent delayed

submission and presentation of the stamped conveyance deed, the

appellant also took its own time to compute and calculate the misuse

charges. Till the misuse charges were communicated, obviously the

respondent would not have made payment. This delay and default on

the part of appellant should not prejudice and cast a higher financial

burden on the respondent.

18. In view of the aforesaid discussion, the appeal is partly allowed

and it is directed that the respondent will be liable to pay misuse

charges with effect from 26th September, 1996 till 28th June, 1999. This

means, the respondent will be liable to pay misuse charges of

Rs.1,71,770.29/- (Rupees One Lakh Seventy One Thousand Seven

Hundred Seventy and Twenty Nine paise only) for the period 26th

September, 1996 to 31st March, 1997, Rs.4,12,438.44/- (Rupees Four

Lakh Twelve Thousand Four Hundred Thirty Eight and forty four

paise only) for the period 1st April, 1997 to 31st March, 1998,

Rs.5,36,398.19/- (Rupees Five Lakh Thirty Six Thousand Three

Hundred Ninety Eight and Nineteen paise only) for the period 1st April,

1998 to 31st March, 1999 and Rs. 1,31,119.53 (Rupees One Lakh

Thirty One Thousand One Hundred Nineteen and Fifty Three paise

only) for the period 1st April, 1999 to 28th June, 1999. The respondent

is therefore liable to pay misuse charges of Rs. 12,51,726.45/- (Rupees

Twelve Lakh Fifty One Thousand Seven Hundred Twenty Six and

Forty five paise only). The respondent is given liberty to make the said

payment on or before 30th June, 2011 and on such payment being

made, the conveyance deed shall be executed. The appeal is

accordingly disposed of. There will be no order as to costs.

(SANJIV KHANNA) JUDGE

(DIPAK MISRA) CHIEF JUSTICE MARCH 30, 2011 NA