Ghanshyam Dass Seth & Anr. vs Union Of India
2011 Latest Caselaw 4273 Del

*           IN THE HIGH COURT OF DELHI AT NEW DELHI



                                                  Reserved on : 02.08.2011
%                                             Date of decision : 02.09.2011


+                               LPA No.765/2003


GHANSHYAM DASS SETH & ANR.                                      ...APPELLANTS


                                Through:        Mr.Vikas Singh, Sr.Adv. with
                                                Mr.Naunidh S.Arora, Advocate.


                                        Versus


UNION OF INDIA                                                  ...RESPONDENT

                                Through:        Mr.Sachin Datta and Ms.Gyatri
                                                Verma, Advocates




CORAM:
HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
HON‟BLE MR. JUSTICE RAJIV SHAKDHER

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

2.      To be referred to Reporter or not?                              YES

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



_________________________________________________________________________________________
LPA No.765/2003                                                            Page 1 of 37
 SANJAY KISHAN KAUL, J.

1. A perpetual lease deed was executed on 28.10.1959

by the President of India in favour of Smt.Raj Karni,

Sh.Harbhajan Dass and Mr.Narain Dass in respect of

plot no.32-33, NH-IV, Lajpat Nagar, admeasuring 1450

square yards.

2. The covenant of the lease in para I(ii) inter alia

provided that a building would be constructed on the

plot within 24 calender months. On violation of any

term of the lease, the perpetual lessor was entitled to

re-enter upon the property.

3. In respect of the said land, plot no.32 was sold by the

perpetual lessees to Smt.Vimla Rani vide a sale deed

executed on 17.10.1960 which was duly registered.

However, no construction was carried out nor was

apparently even mutation obtained in respect of the

property for almost 13 years. This resulted in a show

cause notice dated 29.08.1973 being issued by the

Land and Development Office/respondent threatening

to re-enter the property on account of non

construction and consequent violation of clause I(ii) of _________________________________________________________________________________________

the lease deed. Since no satisfactory cause is stated

to have been shown, re-entry order was passed on

03.04.1975. It is, however, not clear as to why but the

fact is that the re-entry notice was sent to Smt.Shiela

Sandhu. Smt.Vimla Rani addressed a letter dated

25.04.1975 to the L&DO stating that she had informed

vide a registered AD letter dated 22.11.1960 that she

was the perpetual lessee of the plot. Smt.Vimla Rani

further volunteered to pay any charges for withdrawal

of re-entry. The L&DO in response to this letter on

26.05.1975 communicated the charges for

regularization of breaches temporarily payable up to

30.06.1974 with an undertaking to be furnished by

Smt.Vimla Rani on a non judicial stamp paper that she

would remove the breaches by 30.06.1974 or get

them regularized beyond the said date. In para 5 of

the said letter, it was stated as under:

"5. The present letter offering terms will not act as a waiver for recovery of the said damage charges which may in the discretion of the lessor, be found payable by you beyond the dates mentioned above for breaches existing hereafter at site."

_________________________________________________________________________________________

4. The aforesaid charges were paid and subsequently the

property was mutated in the name of Smt.Vimla Rani

vide a memorandum dated 09.10.1975 on the same

terms and conditions as laid down in the perpetual

lease deed.

5. The appellant no.2, Smt.Vimla Rani, still did not take

steps to remove the breaches inasmuch as no

construction was raised. With the said factual

position, on 17.02.1976, Urban Land (Ceiling and

Regulation) Act, 1976 („the said Act‟ for short) came

into force. The objectives of the said Act as set out in

the Preamble show that the vacant land in the urban

areas was sought to be brought within a ceiling limit

and such excess land was to be acquired. The said Act

also provided for regularization of construction of

building on such land and for matters connected

therewith with a view to prevent the concentration of

urban land in the hands of a few persons and

speculation and profiteering therein and with a view to

bring about a more egalitarian distribution of urban

_________________________________________________________________________________________

land. The said Act was, however, made effective from

a retrospective date of 17.02.1975. The property in

question was thus covered under the said Act being an

excess vacant land in the case of Smt.Vimla Rani. The

L&DO served a letter dated 12.01.1977 on Smt.Vimla

Rani once again in respect of her failure to remove the

breaches etc. before exercising the powers of re-entry

to cancel the lease deed for non construction in

respect of the property in question. Smt.Vimla Rani in

terms of the letter dated 24.01.1977 claimed that the

ownership title in the premises was restored to her

only on 09.10.1975 and she should be allowed the

time limit of two years for construction of the plot up

to 09.10.1977. She expressed her willingness to

proceed with the construction of the plot for which she

stated that she had applied to the competent authority

under the said Act for release of the plot. It was also

stated that the release orders were still awaited.

6. The L&DO vide letter dated 21.05.1977 acceded to the

request of Smt.Vimla Rani by extending the date for

completion of construction without levy of penalty up _________________________________________________________________________________________

to 30.06.1977. She was put to caution that no further

extension will be granted beyond this date. Factually,

no construction was carried out.

7. The proceedings continued under the said Act and it is

the case of Smt.Vimla Rani that a draft statement was

prepared under Section 8(1) of the said Act on the

basis of the statement filed by her. On disposal of

objections, a final statement under Section 9 of the

said Act was passed vide order dated 20.06.1980 in

terms whereof the competent authority declared the

entire plot admeasuring 606.19 square meters as

excess vacant land. Smt.Vimla Rani filed an appeal

against that order before the appellate authority on

17.07.1980, but the same was dismissed on

01.04.1981.

8. It is the case of the appellants that thereafter an

application was filed for grant of exemption of the

aforesaid excess vacant land under Section 20 of the

said Act. It is their say that a person was allowed to

retain excess vacant land ad measuring more than

600 square mtrs. provided he was prepared to develop _________________________________________________________________________________________

the same as a group housing. On such an application

being filed, the Delhi Administration is stated to have

enquired from DDA and L&DO on 01.08.1981 as to

whether group housing was permissible on the excess

vacant land. Similar communications in this behalf

ensued. The appellants state that vide letter dated

15.02.1982 of the DDA and 17.01.1983 of the L&DO it

was affirmed that group housing is permissible on the

plot in view of the notification dated 11.12.1975 in

terms whereof the exemption may be granted in

respect of a plot where the plot is more than 500

square mtrs. Another application is stated to have

been made under Section 20 of the said Act on

09.01.1987 to the Secretary, Land and Building

Department for permission to construct a group

housing project. However, the request for exemption

was declined on 06.07.1987 by the LG though no

action was taken under Section 10 of the said Act. It is

only on 18.09.1992 that a notification is stated to have

been issued under Section 10(1) of the said Act for

acquiring the land and interested parties were asked _________________________________________________________________________________________

to file their claims within 30 days from the date of the

publication of the notification. Objections were filed

on behalf of the appellants to the notification, but on

02.12.1992 another notification under Section 10(3) of

the said Act was issued declaring the property in

question as excess vacant land which shall be deemed

to have been acquired. The appellants filed WP(C)

No.4529/1992 seeking quashing of the actions of the

respondent. Notice was issued on that petition and

status quo orders were passed. The writ petition was

admitted and interim orders were made absolute

during the pendency of the writ petition. It may be

noted that there were a number of similar writ

petitions pending.

9. The next development which took place was the

repeal of the said Act on 22.03.1999. The effect of the

repeal was that all such lands stood released from the

applicability of the said Act if the possession had not

been taken over under the said Act. Even in the case

of deemed vesting of the land under Section 10(3) of

the said Act, the land owners were entitled to retain _________________________________________________________________________________________

possession provided they paid back to the State any

compensation that they may have received in respect

of the land. The appellants had not received any

compensation and the possession continued with

them. The land thus became free from the rigours of

the said Act. The letter dated 09.11.2000 was thus

addressed to the L&DO for grant of NOC for sanction of

building plans on the plot followed by reminders dated

14.03.2001 and 08.06.2001. The appellants received a

communication dated 16.05.2002 which specified the

penalty for belated construction from 01.07.1977 to

31.12.2003 amounting to Rs.24,42,227/- plus ground

rent @ of Rs.8 per annum from 15.05.1975 to

14.07.2000. The appellants made various

representations against the levy of penalty for a period

prior to 22.03.1999 predicated on the plea of inability

of the appellants to construct on the plot in question in

view of the land having been declared as excess

vacant land under the said Act. These representations

dated 28.05.2002, 30.05.2002 and 05.09.2002 were

responded to by the respondent on 03.10.2002 once _________________________________________________________________________________________

again demanding the amount. The appellants thus

filed WP(C) No.990/2003 challenging levy of penalty.

Notice was issued on this petition and interim stay was

granted against the impugned order dated

16.05.2002. On final hearing being concluded, the

judgment was pronounced on 25.09.2003 dismissing

the writ petition.

10. The sole aspect which appears to have been urged

and thus considered by the learned Single Judge in the

said order is the plea of appellant no.2 being

prevented from constructing any building on the plot

in view of the provisions of Sections 29 & 30 of the

said Act. The learned Single Judge concluded that

Section 29 did not impose a ban on construction, but

merely regulated construction and that the

construction proposed to be carried out ought not to

have a plinth area in excess of 300 square metres.

This was found not to aid the appellants. The other

plea which was examined arose from Section 20 of the

said Act as exemption had not been granted to the

appellants. Learned single Judge found that from _________________________________________________________________________________________

29.10.1958 the plot had been lying vacant for 28 years

till the said Act came into force. Even after appellant

no.2 purchased it, she did not carry out the

construction. She even moved an application for

extension of time for construction which was granted

and the property was not re-entered because of this

reason. The writ petition was dismissed, but the

appellants were permitted to make the payment of the

penalty amount within sixty days of the

pronouncement of the judgment and upon such

payment, the respondent was to issue a No Objection

Certificate. It is the aforesaid order, which has been

impugned in the present appeal. Notice was issued on

the appeal on 07.11.2003 and the counsel for the

appellants volunteered to deposit the amount as

directed by the learned Single Judge subject to the

outcome of the appeal. This fact was taken note of

while disposing of the interim application. The amount

was deposited and the plot stands constructed upon

as stated by learned counsel for the appellants.

_________________________________________________________________________________________

Appellant no.2 passed away and her legal heirs have

been brought on the record.

11. Learned senior counsel for the appellants contended

before us that the plea advanced on the basis of

Section 29 of the said Act was apparently misplaced as

that provision would not aid the appellants in any

manner. Learned counsel, however, submitted that

the relevant provision in the present case would be

Section 3 r/w Section 2(l) of the said Act. A ground in

this behalf has been taken. In order to appreciate this

plea, we re-produce the relevant provisions of Section

3 r/w Section 2(l) of the said Act.

"3. Except as otherwise provided in this Act, on and from the commencement of this Act, no person shall be entitled to hold any vacant land in excess of the ceiling limit in the territories to which this Act applies under sub-section (2) of section 1.

xxxx xxx xxxx xxx xxxx xxx xxxx xxx xxxx xxx

2(l) "to hold" with its grammatical variations, in relation to any vacant land, means-

(i) to own such land; or

(ii) to possess such land as owner or as tenant or as mortgagee

_________________________________________________________________________________________

or under an irrevocable power of attorney or under a hire purchase agreement or partly in one of the said capacities and partly in any other of the said capacity or capacities.

Explanation - Where the same vacant land is held by one person in one capacity and by another person in another capacity, then, for the purposes of this Act, such land shall be deemed to be held by both such persons;"

12. Learned senior counsel submitted that in terms of

Section 3 of the said Act, no person shall be entitled to

hold any vacant land in excess of the ceiling limit. The

meaning of „to hold‟ is as defined in Section 2(l) of the

said Act which will include ownership or possession. It

was thus submitted that once the appellants could not

hold the said land, there could not be any penalty

charge on them for non construction on the plot.

13. It was the say of learned senior counsel for the

appellants that a statutory legal impediment came in

the way of the appellants in view of the provisions of

the said Act coming into force retrospectively before

the extended period, in which the construction was to

be made by appellant no.2, expired. The said Act

came into force on 17.02.1976 with effect from

_________________________________________________________________________________________

17.02.1975. The respondent had condoned the delay

in construction and granted extension on 26.05.1975

on payment of charges which were duly paid. The

memorandum dated 09.10.1975 mutated the property

in the name of the appellant no.2 and thus the

appellants were entitled to construct within a period of

two years from the said date i.e. up to 09.10.1977.

Before expiry of such time, the said Act came into

force. It is in view thereof, that the extended period

granted by the respondent vide letter dated

21.05.1977 up to 30.06.1977 could not be availed of.

14. Learned counsel for the respondent on the other hand

laid emphasis on the fact that for decades no

construction has been carried out on the plot contrary

to the terms of the lease deed. Appellant no.2 had

become the owner of the plot in 1960 as claimed by

her and yet right till 1973 no construction was made

when show cause notice was issued by the

respondent. Even thereafter, when on payment of

charges, the re-entry was withdrawn, no construction

was carried out. The property was even mutated in _________________________________________________________________________________________

favour of appellant no.2, but appellant no.2 kept on

just sitting on the plot without taking any action for

construction. Learned counsel emphasized on the fact

that even while imposing the charges as per letter

dated 26.05.1975, clause 5 of that letter had made it

clear that there would be no waiver for recovery of the

damage charges which may be found payable in future

for the breaches. The breach being undisputedly

present, it was submitted that the respondent was well

within its rights to demand the amount of penalty

towards non construction.

15. Learned counsel for the respondent has submitted that

the respondent was well within its rights to demand

and recover penalty for breaches of the terms of the

lease as the appellants had not constructed on the

plot. It was his say that the respondent cannot

continue to enjoy the property and yet claim that they

are not bound by the terms of the lease.

16. A further submission advanced was that there was no

prohibition from construction under the said Act as

observed in the impugned order and learned counsel _________________________________________________________________________________________

for the appellants had admitted before us that the

provisions of Section 29 of the said Act would not aid

the appellants. It was submitted that the provisions of

Section 3 r/w Section 2(l) of the said Act could not aid

the appellants as they prohibited a person only from

holding any vacant land in excess of the ceiling limit

but the fact remains that the appellants continued to

hold the land.

17. Learned counsel for the respondent, in the end,

referred to the judgment of the Supreme Court in Her

Highness Maharani Shantidevi P. Gaikwad v. Savjibhai

Haribhai Patel; (2001) 5 SCC 101 to emphasize that

the State legislature had only surrendered the right to

legislate in respect of the laws relating to the

imposition of ceiling on the holding of urban

immoveable property by passing a resolution under

Article 252 (1) of the Constitution of India and all

matters connected therewith or ancillary and

incidental thereto in favour of Parliament. It was only

a limited surrender in terms of that resolution and the

_________________________________________________________________________________________

aspect of town planning and development by the State

was not surrendered.

18. We may notice that in rejoinder, learned senior

counsel for the appellants pointed out that no

construction could be carried out without obtaining the

clearance from the competent authority as the

municipal authority used to demand a No Objection

Certificate under the said Act. He, however, conceded

that though this was the position at the relevant stage

of time, no pleadings in this behalf have been made.

19. In the aforesaid circumstances the short issue which

arises for our consideration is :- whether the appellant

can be called upon to pay penal charges for failure to

construct a superstructure in accordance with

condition No. I(ii) of the lease deed due to the

intercession of ULCRA?

20. The formulation of the issue answers for us at least

one part of query, which is, that after the date of

repeal of ULCRA, the appellant is not entitled to a

waiver of penalty on the stated ground, i.e., for the

period 22.03.1999 onwards. However, this still leaves _________________________________________________________________________________________

unanswered as to what would be the position for the

period 01.07.1977 to 22.03.1999. The learned counsel

for the appellant has not articulated before us the

legal principle on which he would have us peg his

submission seeking effacement or waiver of penalty.

One of the conditions of the lease, i.e., condition No.

I(ii) required the lessee to build a superstructure within

24 months, on the lines prescribed therein. The

appellant says that he stood relieved of this burden

and consequences of its breach since ULCRA

interceded in the meanwhile.

21. There is admittedly no provision in ULCRA which alters

the aforementioned obligation which runs with the

land. Therefore, the submission of the learned counsel

for the appellant to the effect that since Section 3 of

ULCRA prohibited a person from holding land in excess

of the ceiling limits prescribed therein would be of no

assistance. The reason for this is the scheme of

ULCRA which operates broadly on the following lines:

On the commencement of ULCRA, no doubt, a person

is not entitled to hold any vacant land (save and _________________________________________________________________________________________

except as provided in ULCRA itself) in excess of the

prescribed ceiling limits; the determination of such

excess land requires the holder of such vacant land to

pass through three stages prescribed under Sections

6, 8 & 9 of ULCRA. The ceiling limits prescribed under

Section 4 are categorised based on the location of the

land. Therefore, a person holding vacant land in

excess of ceiling limits is required to file a statement

under Section 6 before the competent authority

specifying therein particulars, such as, the location,

extent, value and other prescribed aspects of all

vacant lands including the nature of his right, title and

interest in the land(s) in issue. More particularly he is

also required to specify the vacant land(s) within the

ceiling limit which, he desires to retain. On such a

statement being filed under Section 6, the competent

authority after such an inquiry as it deems fit,

prepares a draft statement qua the person who has

filed a statement under Section 6. The statement

would contain the particulars prescribed under sub-

section (2) of Section 8. In terms of sub-section (3) of _________________________________________________________________________________________

Section 8, the draft statement is required to be served,

in the manner prescribed, on the concerned persons

along with the notice calling upon them to file

objections, if any, within the stipulated period of 30

days or within such further period as may be specified.

After giving the objector, a reasonable opportunity

and, on consideration of the objections filed, the

competent authority is required to pass an order qua

the objections under sub-section (4) of Section 8. It is

only thereafter, that the competent authority makes

out a final statement. The final statement would

contain alterations, if any, in the draft statement

based on the orders passed on the objections filed. A

copy of the draft statement under Section 8(3), is also

served on the owner of the land if, the vacant land is

held; under lease, mortgage or a hire purchase or an

irrevocable power of attorney.

22. It is on completion of the exercise under Section 9,

and thereupon, the service of the final statement

prepared on the person concerned, that the

competent authority issues a notification under _________________________________________________________________________________________

Section 10(1) of ULCRA indicating therein the

particulars of the vacant land held, by such a person,

in excess of the ceiling limit. The notification thus

published will state that such vacant land is acquired

by the concerned State Government, and that persons

interested in such vacant land, should file their claims

either personally or through their agents specifying

therein their interest in the land. The determination of

the claim (s) is made under sub-section (2) of Section

10. The aforesaid is followed by a declaration under

sub-section 10(3) of ULCRA, published in the official

gazette, indicating therein the date from which such

land is deemed to have been acquired by the

concerned state government. It is upon publication of

such a declaration that the land in issue, vests in the

concerned State Government free from all

encumbrance from the date so specified.

23. It is during the period : commencing from the date of

publication of notification under sub-section (1) of

Section 10 and ending with the date specified in the

declaration made under Section 10(3); that no person _________________________________________________________________________________________

is entitled to deal with such excess vacant land by way

of transfer, sale, mortgage, gift, lease or otherwise and

alter its use or cause its use to be altered. Transfer

made in contravention of this provision is deemed to

be null and void.

24. The Section 11 provides for compensation to be paid

in respect of vacant land acquired by the Government.

The power of exempting a person from the acquisition

of excess land is conferred on the State Government

under Section 20 of ULCRA. This power, the State

Government is obliged to exercise, keeping in mind

the location of the land, the purpose for which it was

used or proposed to be used and other relevant

factors having regard to expediency and public

interest.

25. We may also notice at this stage certain other

provision, which largely pertains to transfer of vacant

land and construction thereof. In this regard we may

first refer to Section 5 of ULCRA deems transfer made

on commencement of ULCRA as void. Section 26

obliges a person holding a vacant land within ceiling _________________________________________________________________________________________

limits to give notice to the competent authority before

effecting a transfer of such lands. If notice is given, the

concerned state government in accordance of sub-

section (2) of section 26 shall have the first option to

purchase such lands. Such option is required to be

exercised within a period of 60 days from the receipt

of notice, failing which, it is presumed that the

competent authority has no intention to purchase the

land on behalf of the state government and that it is

lawful for the applicant to transfer the land as he likes.

Section 27 prohibits transfer of urban or urbanisable

land with building or a portion of such building for a

period of 10 years of the commencement of ULCRA or

from the date of the construction of building whichever

is later, except with the permission of the competent

authority. If the competent authority were to refuse

the grant of permission then it is required to give

reasons in writing which, it is further obliged to

communicate to the applicant. As in section 26, there

is also a provision of deemed approval and the right to

purchase such property by the competent authority _________________________________________________________________________________________

(see Sections 4, 5, 27). Section 29 permits

construction of building with dwelling units upto the

prescribed plinth area depending on category in which

the land on which the proposed building is to be

constructed, is located. To be noted that the Supreme

Court in the case of Bhim Singhji Vs. Union of India,

(1981) 1 SCC 166 had declared sub-section (1) of

Section 27 invalid insofar it imposed a restriction on

transfer of any urban or urbanizable land which was

well within the ceiling limits.

26. The broad scheme of ULCRA, therefore, seems to

indicate that it is not as if on the said statute coming

into force the appellant had lost the right to make use

of the land. More specifically, there was no prohibition

in carrying out construction on the land in issue, as

sought to be contended immediately on ULCRA being

enacted.

27. The scheme of ULCRA came up for consideration

before the Andhra Pradesh High Court in the case of

Srinivasa Builders Pvt. Ltd. v. Govt. of Andhra Pradesh,

(1978) 1 APLJ 174. Briefly the facts obtaining in the _________________________________________________________________________________________

said case were as follows. The petitioner who had

sought permission to construct flats/dwelling units on

land owned by it was denied permission by the

municipal corporation in view of the provisions of

ULCRA being triggered. The petitioner challenged the

denial of permission on various grounds, including the

ground that the municipal corporation while granting

permission was not fettered by the provisions of the

central Act in particular Section 3 of ULCRA. The

official respondents opposed the relief sought for in

the writ petition on the ground that on the enactment

of ULCRA, the petitioner by virtue of the provisions of

Section 3 of ULCRA Act was not entitled to hold any

land in excess of the permissible limits and, therefore,

as a necessary consequence was not entitled to carry

out any construction on such land. The court repelled

the submission of official respondents and while doing

so made the following crucial observation:-

"(6) ... It is therefore, necessary to examine whether the proposed construction is prohibited by the said Central Act, or whether, by permitting the petitioner to carry on the said construction, any of the provisions of the _________________________________________________________________________________________

Central Act are violated. This necessitates an examination of the provisions of the said Central Act.

... ... ... ... ... ... ...

28. ... His first and main contention is that since Sec.3 prohibits any person from holding any vacant land in excess of the ceiling limit, it must be deemed that with effect from the appointed day the owner of such excess land loses his title thereto, and if so, he cannot be allowed to make any construction. It is difficult to accede to this submission, in view of the specific provisions contained in Section 10 which have been referred to by me above in detail. In view of the said provisions, it cannot be said that title of the persons holding excess lands, in respect of such excess lands, is taken away with effect from the date of commencement of the Act, Their title will be extinguished only after the said excess land is acquired in accordance with the provisions of Section 10. In fact, sub-section (3) of sec.10 says that the said excess land shall vest absolutely in the State Government only with effect from the date specified in the final publication under the said sub-section. If so, it cannot be said that the holders of excess lands lose their title to such excess lands with effect from the date of commencement of the Act.

The question then is whether there is any other provision in the Act which, by necessary implication, prohibits such a construction? What Mr.Babulu Reddy argues is that there is no such prohibition (either express or by construction has been made will be continued to be treated as vacant land for the purpose of the Act and that, the competent authority may be entitled to ignore the said constructions and treat the said land as excess and acquire the same ignoring _________________________________________________________________________________________

the constructions made. In other words, he says that his client is prepared to take the risk involved. He says that his client will make the construction, and if the competent authority or the Government choose to treat the said land, constructed upon, as a vacant land and acquire the same as vacant land, we would meet the same by taking appropriate steps under and according to the Act. But, that would precisely be the effect of the definition, of "vacant land", contained in Section 2(q). According to the said definition, any land upon which construction is made after the appointed day, is liable to be treated as vacant land only. The said definition, however, cannot be construed as prohibiting construction on excess vacant land; by necessary implication. Once that is so, it must be held that there is no provision in the Act which either expressly or by necessary implication prohibits the making of construction upon the excess vacant land."

(emphasis is ours).

29. The principle set forth in the aforesaid judgment was

followed in a Division Bench judgment of the Andhra

Pradesh High Court in the case of G. Jayamala Vs.

Commissioner, Municipal Corporation of Hyderabad,

(1989) 1 APLJ 363.

30. Having regard to the scheme of the Act and the ratio

of the judgment in Srinivasa Builders Pvt. Ltd.‟s case

(supra), Section 3 of the ULCRA did not prohibit from

making use of the land including carrying on

_________________________________________________________________________________________

construction on the land in issue, at least till the date

when notification under Section 10(1) of ULCRA was

issued. As discussed hereinafter the events which

followed post the issuance of notification under

Section 10(1), that is, the act of appellant filing

application for exemption under Section 20, the

litigation which ensued therefrom and the orders of

the court which followed - only persuade us to reaffirm

the position that the appellants ought not be relieved

from paying the impugned penal charges.

31. As per the appellant‟s own averments made in the writ

petition, order under Section 9 of the ULCRA was

passed on 05.06.1980. An appeal against the said

order was dismissed on 01.04.1981. Thereafter, the

appellant filed an application under Section 20 of the

ULCRA, on 30.03.1981. The ostensible ground for

seeking exemption was that the petitioner had a

proposal for implementing a group housing scheme on

the land in issue; which as per the prevailing

guidelines for exemption was a route available to

holders having in their possession land in excess of _________________________________________________________________________________________

600 sq. yards. The application filed under Section 20

was, however, dismissed on 06.07.1987. The

notification under Section 10(1) of the ULCRA was

issued only on 21.09.1992. Against, the notification

issued under Section 10(1), the appellant filed

objections on 12.10.1992. It appears without those

objections being decided, the Delhi Administration,

Department of Land & Building issued a notification

under Section 10(3) of the ULCRA, on 02.12.1992.

Since the appellants became aware of the fact that

similarly placed persons had obtained exemptions,

they filed a writ petition bearing no. 4529/1992; laying

a challenge to order dated 06.07.1987 whereby, his

application for exemption under Section 20 of ULCRA

was rejected by the Lt. Governor. As per the

appellants own showing, notice in the application was

issued on 06.01.1993. By the very same order, the

official respondents were directed to maintain status

quo. As per the appellants averment made in the writ

petition, on 20.01.1994 rule was issued in the

aforementioned writ petition, and a direction was _________________________________________________________________________________________

made that interim orders passed earlier would

continue to operate till the disposal of the writ petition.

32. As indicated above, ULCRA was repealed on

22.03.1999. The appellant for the first time appears to

have written a letter to the L&DO for grant of no

objection certificate (in short „NOC‟) in order to obtain

a sanctioned building plan qua the building proposed

to be constructed on the land in issue. The appellant

appears to have sent reminders to the L&DO on

14.03.2001 and 08.06.2001. According to the

appellant it was only on 16.05.2002 she received the

impugned letter seeking payment of money towards

penalty for failure to construct a super-structure, along

with a demand for ground rent. In response thereto

the appellant filed representations dated 28.05.2002,

31.05.2002 and 05.09.2002 objecting to the imposition

of penalty, noticeably, for a period prior to the date of

repeal of ULCRA, i.e., 22.03.1999, on the ground that

no construction could have been carried out on the

land in issue as it was declared an excess land under

ULCRA. Since official respondents rejected the _________________________________________________________________________________________

representations of the appellant vide their letter dated

03/04.10.2002, the appellant approached this court by

way of a writ petition.

33. The dates and events referred to above would show

that the application for exemption filed by the

appellant under Section 20 of the ULCRA, which was

rejected on 06.07.1987, was subject matter of

challenge in writ petition no.4529/1992. A protective

order was passed in the said writ petition which

enured in the appellants favour till well past the date

of repeal. In the interregnum, a notification under

Section 10(1) came to be passed on 21.09.1992

followed by a notification under section 10(3), passed

on 02.12.1992. Therefore, the appellant‟s right to

make use of the land in issue as per Section 10(4) of

ULCRA was, if at all, impeded after 21.09.1992; a

rigour which was also diluted by virtue of interim

orders of status quo passed in writ petition 4529/92 on

06.01.1993 and 20.01.1994. Appellant‟s own

averments show that even before the coming into

force of ULCRA she was in breach of the condition no. I _________________________________________________________________________________________

(ii). As a matter of fact the L&DO‟s letter of

26.06.1995 which communicated the charges payable

for regularization of the breach temporarily up to

30.06.1974, came with the caveat that the said

communication could not be construed as waiver of

recovery of damages for breaches committed

hereinafter.

34. It is important to note (that post mutation of land in

appellant‟s favour in 09.10.1975 which was bought in

1960) an application was moved for extension of time

to construct, on 24.01.1977; well past the date of

enactment of ULCRA. In the letter of 24.01.1077, the

appellants had referred to the fact that an application

for exemption under Section 20 of ULCRA had been

filed with the competent Authority. Noticeably, the

L&DO vide 21.05.1977, while granting extension of

time for constitution till 30.06.1977 without payment

of penalty till such date, did not advert to the factum

of the intercession of ULCRA.

35. The appellant on his own showing approached the

L&DO for issuance of a No-Objection Certificate (in _________________________________________________________________________________________

short N.O.C.) for the first time on 09.11.2000. There

was no attempt by the appellant to approach the

L&DO either before the enactment of ULCRA or even

prior to the issuance of notification under Section

10(1) of the ULCRA. In these circumstances, could it

be said that the appellant, who was already in breach

of the condition I(ii) of the lease, even prior to the

enactment of the ULCRA, was impeded in complying

with the said condition because of the enactment. The

answer to this would, as is obvious, be in the negative.

We started by posing a question as to the legal

principle on which such a submission made on behalf

of the appellant could be pegged on. To our minds, no

party can get away from a bargain made, which is

enforceable in law, whether it be a private party or a

statutory authority. A bargain made gives the

promisee a right to seek performance. In law, a

promisor is obliged to fulfill his part of the obligation

unless the performance is excused by law. There is no

such mandate of the law, in the present case, as has

been examined by us hereinabove. Only other _________________________________________________________________________________________

situation in which perhaps a promisor need not fulfill

his part of the bargain is when a contract is discharged

or it is novated. The appellant in this case is not

claiming novation but is perhaps claiming a partial

discharge of his obligation under the lease during the

period ULCRA remained on the statute book. The

appellants cannot claim a complete discharge of the

lease, as that would perish their rights along with the

obligations under the lease. A clue as to whether

under the Indian Contract Act, 1872 (in short,

„Contract Act‟) a partial discharge can be claimed is

available in illustration (e) of Section 56 of the

Contract Act. The same is extracted herein-below for

ready reference:-

"A contracts to act at a theatre for six months in consideration of a sum paid in advance by B. On several occasions A is too ill to act. The contract to act on those occasions becomes void."

If this stance is taken to be correct, the argument of

the appellant would thus veer around to saying that

with the enactment of ULCRA a supervening event

interceded making it impossible for the appellants to _________________________________________________________________________________________

fulfill the condition prescribed under the lease and

therefore the appellants ought to be relieved of the

burden, and the consequences which ensue from such

an obligation.

36. We may notice at this stage that even though not so

articulated, the argument invokes in sum and

substance the principle of partial discharge. The

question then would be if such a defence is available

would it help the cause of the appellants. In our view,

it would not as this principle operates only if the

person seeking recourse to such a defence is not

already in breach, that is, even before the event

supposedly creating a supervening impossibility in the

performance of obligations intervenes. In other words,

the breach should not precede the event creating a

supervening impossibility in performance of obligation

under the contract. As is demonstrable in this case,

the breach continued all throughout. The L&DO on the

other hand did not give up its right to claim damages.

Therefore, a fortuitous event of enactment of ULCRA,

which equally, though not so fortuitously for the _________________________________________________________________________________________

appellants, having been repealed would not, in our

view, relieve the appellant from payment of penal

charges, even for the period spanning between

01.07.1997 to 22.03.1999. As indicated above, in any

event after 22.03.1999 the appellant is required to pay

the penalty and ground rent so demanded.

37. We have examined the arguments advanced on behalf

of appellant and principle of partial discharge of his

obligations to comply with the condition I(ii) of the

lease during the period of eclipse, so to say (i.e.,

during the period when ULCRA was on the statute

book) notwithstanding the view taken by the Supreme

Court in the case of Raja Dhruv Dev Chand Vs. Raja

Harmohinder Singh and Anr., (1968) 3 SCR 339

whereby the Supreme Court has been held that the

defence of discharge is not available qua a lease as it

is a concluded contract. It is pertinent to note that a

lease is a contract creating a demise in praesenti. It

is, therefore, in the nature of an executed contract and

in that sense different from a contract in which rights

are yet to be exercised and obligations fulfilled. The _________________________________________________________________________________________

latter is ordinarily referred to as an executory contract.

Only to be noted, there is, however, a contra view of

the English Courts (See National Carriers Ltd. Vs.

Panalpina (Northern) Ltd., (1981) A.C.675).

38. Therefore, for the aforesaid reasons the appeal is

dismissed leaving parties to bear their costs.

SANJAY KISHAN KAUL, J.

SEPTEMBER 02, 2011                                           RAJIV SHAKDHER, J.
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