Laj Gandhi vs Delhi Development Authority
2011 Latest Caselaw 5341 Del

           *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                    Date of decision: 4th November, 2011

+                         WP(C) NO.3175/2007

LAJ GANDHI                                                ..... Petitioner
                          Through:      Dr. Bhatia & Mr. S.S. Sastry, Advs.

                                     Versus

DELHI DEVELOPMENT AUTHORITY                 ..... Respondents
                 Through: Mr. Ajay Verma, Adv.
CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
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.


RAJIV SAHAI ENDLAW, J.

1. The petition seeks mandamus to the respondent DDA to convert the

leasehold rights in the land underneath the property No.A-1/111, Safdarjung

Enclave, New Delhi-110 029 into freehold. Notice of the petition was

issued and pleadings have been completed. The counsels for the parties

have been heard.

2. The petitioner admits that notwithstanding the term in the Perpetual

Lease of the land aforesaid, requiring the use of the construction thereon for

residential purposes only, the property was let out to the Institute of

Company Secretaries of India (ICSI) during the period from 01.08.1973 to

31.01.1982 for use as office but with the permission of the respondent DDA.

The petitioner further admits that thereafter the property was let out vide

Lease Deed dated 01.07.1982 to Educational Consultants of India Ltd.

(EDCIL) for use as its Consultancy Office, Guest House / Transit

Accommodation etc. subject to the permission being granted by the

respondent DDA; however no such permission was obtained. It is further

admitted that for such non conforming use of the property, prosecution

under Section 14 read with Section 29(2) of the Delhi Development Act,

1957 was initiated which resulted in conviction vide order dated 23.07.1985.

3. The petitioner however claims to have filed proceedings under

Section 14(1)(k) of the Delhi Rent Control Act, 1958 against the tenant

EDCIL in which eviction order was made on 06.08.1988 and pursuant to

settlement, the tenant vacated the property on 31.01.1990.

4. The petitioner in the year 1999, in accordance with the Policy of the

respondent DDA of the year 1992, applied for freehold conversion and

deposited charges therefor. Upon failure of the respondent to process the

said application, the present writ petition was filed.

5. The respondent DDA in its counter affidavit has pleaded that upon

being summoned in the proceedings under Section 14(1)(k) of the Act, it had

clearly intimated that it was not willing to regularize the misuse but could

regularize the past misuse on payment of misuse charges. It is further

pleaded that action with respect to the misuse is taken in accordance with the

DDA Resolution No.546 dated 13.07.1987 (subsequently clarified to be

dated 13.07.1967) and the petitioner is liable to pay misuse charges

amounting to `19,22,060/- for the period 22.05.1983 to 31.01.1990 and

permission fee of `6,78,667/- i.e. total of ` 20,00,727/- for being entitled to

have the freehold conversion.

6. The petitioner in its rejoinder has of course pleaded that no demand

for misuse charges was raised at any time and there is no basis for the claim

for permission fee.

7. The petitioner thereafter filed CM No.4689/2009 enclosing therewith

the demand letter dated 19.03.2009 of the respondent DDA on the petitioner

of `48,38,322/- towards misuse charges from 22.05.1983 to 31.03.1990 for

an area of 3780 sq. ft. on basement, ground floor and first floor.

8. Attention of the counsel for the petitioner was invited to M/S J.S.

Furnishing Co. (P) Ltd. Vs. UOI MANU/DE/3152/2011, Satya Mohan

Sachdev Vs. UOI MANU/DE/3449/2011 and Vikramaditya Bhartia Vs.

DDA MANU/DE/3691/2011 laying down:

(i) That freehold conversion cannot be claimed as a matter of right

and can be availed of only on the terms offered;

(ii) That it being a term of the Policy of freehold conversion that

the same will not be entertained without payment of misuse

charges, no mandamus for freehold conversion without

payment of the said misuse charges can be issued;

(iii) Even though in accordance with Jor Bagh Association (Regd.)

Vs. Union of India 112 (2004) DLT 690, L&DO may have

been held to be not entitled to claim or recover misuse charges,

since the Policy for freehold conversion is subject to payment

thereof, payment of the said charges is a must before availing of

freehold conversion. Reliance was placed on Madhu 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 barred by time, it would not prevent the electricity

supply company from denying supply of electricity for the

reason thereof;

(iv) That the Perpetual Leases of the respondent DDA are different

from those of the L&DO which were for consideration in Jor

Bagh Association (Regd.) (supra). The leases of the respondent

DDA empower DDA to recover charges for misuse;

(v) Misuse charges are in the nature of public money and thus the

principle enshrined in Saurashtra Color Tones Pvt. Ltd.

(supra), Mrs. Madhu Garg (supra) & Swastic Industries Vs.

Maharashtra State Electricity Board AIR 1997 SC 1101

would apply;

(vi) That if a plea of limitation is raised in opposition to the claim of

misuse charges, the same becomes a disputed question of fact

as to when the cause of action would arise and till when the

respondent DDA would have a right to recover and all of which

cannot be adjudicated in the writ petition. The arbitration

clause in the Perpetual Lease of the DDA was also noticed in

this regard.

9. It was thus put to the counsel for the petitioner as to how, in the light

of the aforesaid judgments, the present petition can succeed.

10. The counsel for the petitioner has based the case on the judgments of

the Single Judge reported in 2007 VIII AD (DELHI) 313 of the Division

Bench reported in 2008 (103) DRJ 57 and culminating in the judgment dated

15.03.2011 of the Apex Court in SLP(C) No.27278/2009 titled DDA Vs.

Prof. Ram Prakash and in which case, finding that the DDA after issuing

show cause notice had not taken any follow up action, the claim for misuse

charges after 25 years was held to be bad and directions for conversion of

leasehold rights into freehold issued. The counsel for the petitioner has

contended that the respondent DDA in the present case also did not raise any

demand whatsoever for misuse charges between the year 1983-90 when the

property was under misuse and cannot after nearly 18 years make a demand

therefor. It is contended that the petition is thus entitled to succeed in

accordance with the said judgments.

11. Undoubtedly, the judgments in Ram Prakash have not been

considered in any of the judgments (supra). It thus falls for consideration

whether the demand of the respondent DDA for misuse charges and owing

to non compliance wherewith the freehold conversion applied for by the

petitioner is held up, is bad for the said reason.

12. As aforesaid, I have already in Satya Mohan Sachdev (supra) held

that disputed claims ought to be adjudicated under the Arbitration Clause in

the Perpetual Lease and not in writ jurisdiction. However, since in Ram

Prakash the same was dealt with in writ jurisdiction only, it has become

necessary to reconsider the matter.

13. The counsel for the respondent DDA has invited attention to the

passages in the judgment of the Supreme Court from wherein it is shown

that in the case of Ram Prakash no action whatsoever had been taken by the

respondent DDA for the alleged misuse in question and the respondent DDA

had never informed the lessee in that case that it was required to pay any

misuse charges. It is contended that it was in such factual scenario that the

Supreme Court struck down the demand as barred by limitation. The

counsel for the respondent DDA has further contended that on the contrary

in the present case, the respondent DDA did take action. It is also contended

that the petitioner herself immediately upon initiation of such action by the

respondent DDA had initiated proceedings for eviction of the tenant EDCIL

under Section 14(1)(k) of the Rent Act.

14. The purport of the contention of the counsel for the respondent DDA

is thus that in the present case, it cannot be said that the petitioner was not

aware of the claim of the respondent DDA for misuse charges.

15. I may notice that Section 14(1)(k) of the Rent Act, which otherwise

prohibits a landlord from evicting a tenant, enables the landlord to evict a

tenant if the tenant has dealt with the premises in contravention of the terms

and conditions of the perpetual lease of the land underneath the premises.

The settled legal position (see Faqir Chand Vs. Ram Bhanot (1973) 1 SCC

572 & Rajinder Prasad Jain Vs. Bal Gopal Das 77 (1999) DLT 478 (DB))

is that the landlord is entitled to invoke Section 14(1)(k) even if has

expressly or impliedly consented to the misuse. Section 14(11) of the Act

also gives an opportunity to the tenant to evade eviction if complies with the

terms and conditions imposed by the superior lessor as the respondent DDA

is.

16. Generally, if the tenant stops the misuse or pays the misuse charges

claimed for the past misuse, an order of eviction is not passed. Such

eviction follows only where the tenant fails to do so.

17. In the present case, in the proceedings under Section 14(1)(k) of the

Rent Act at the instance of the petitioner, the tenant EDCIL was held guilty

of contravention of terms and conditions of Perpetual Lease. Thus misuse is

established. It is also admitted that in the proceedings under Section 14(11)

of the Ret Act, the respondent DDA was summoned by the Rent Controller

and had informed that past misuse could be condoned but misuse had to

stop. The misuse charges in such cases are in the domain of the Rent

Controller. However, in view of the compromise between the petitioner and

the tenant, the occasion for such determination did not arise.

18. It was precisely for this reason that the respondent DDA upon receipt

of application for freehold conversion enquired from the petitioner the status

of the proceedings under Section 14(1)(k) of the Act.

19. The claim of the respondent DDA for misuse charges in the present

case has to be thus seen in the light of the aforesaid facts which are

considerably different from the facts in Ram Prakash case. In the present

case, the respondent DDA cannot be said to have slept over its right and not

taken any action. The respondent DDA admittedly prosecuted not only the

lessee but also the tenant and also issued notices under the lease to the

petitioner and which resulted in the petitioner seeking eviction of the tenant

under Section 14(1)(k) of the Rent Act. The respondent DDA therefore can

well be said to have rest assured that the misuse charges have to be

determined by the Rent Controller and not by the DDA (See Curewell

(India) Ltd. Vs. Sahib Singh 1993 Supp.(1) SCC 507. The petitioner on the

contrary by compromising with the tenant relieved the tenant from liability

for any misuse charges. The occasion for the respondent DDA to recover

the misuse charges would have arisen only upon knowledge of the said

compromise. The petitioner in the present case in view of the compromise

cannot also say that, had she been informed earlier of the misuse charges,

she would have recovered it from the tenant.

20. Also, as already observed above the said misuse charges are public

dues. The claim therefore may be barred but the respondent DDA can

certainly insist upon the payment thereof as a condition for freehold

conversion. I fail to see why the principle aforesaid applied by the Apex

Court and by the Full Bench of this Court in relation to the electricity dues

would not apply. On the said aspect also, the judgments in Ram Prakash

are sub silento.

21. There is however some ambiguity as to the assessment of the misuse

charges. There is a vast difference in the misuse charges pleaded in the

counter affidavit and demanded immediately thereafter. There also does not

appear to be any basis for permission fee of `6,78,667/- claimed by the

respondent DDA in its counter affidavit.

22. Thus while holding the petitioner liable for payment of misuse

charges as a pre-condition for conversion of leasehold rights into freehold,

the respondent DDA is directed to within three months hereof and after

hearing objections of the petitioner, pass a reasoned order of the misuse

charges payable in accordance with its Policy, Rules and Regulations. If the

dispute on the quantum of the misuse charges persists, the parties would

have their remedies either under the arbitration clause in the Perpetual Lease

or otherwise as available in law.

The petition is disposed of. No order as to costs.

RAJIV SAHAI ENDLAW (JUDGE) NOVEMBER 4th, 2011 'gsr'..