Rohini Educational Society ... vs Delhi Development Authority & ...
2014 Latest Caselaw 2428 Del

         IN THE HIGH COURT OF DELHI AT NEW DELHI

                                            Judgment delivered on: 13.05.2014

W.P.(C) 5360/2013 & CM 11993/2013
ROHINI EDUCATIONAL SOCIETY (REGD.)                                      ..... Petitioner

                             versus



DELHI DEVELOPMENT AUTHORITY & ANR.                                  ..... Respondents
Advocates who appeared in this case:
For the Petitioner  : Mr Maninder Singh, Sr. Advocate with Mr Kamal Gupta.
For the Respondents : Mr Rajiv Bansal for respondent No.1/DDA.
                      Mr Neeraj Chaudhari, CGSC with Mr Ravjyot Singh for respondent
                      No.2/UOI.




CORAM:
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE SIDDHARTH MRIDUL

                                 JUDGMENT

SIDDHARTH MRIDUL , J

1. The present writ petition has been filed challenging the demand notice

for penalty charges amounting to Rs 91,94,049/- vide letter dated 12.07.2013

issued by Delhi Development Authority to the petitioner Society. The

challenge to the said notice is premised on being ultra vires the notification

dated 17.07.2012 as well as in disregard of the orders passed by this Court

on 20.07.2012 and 09.11.2012.

2. Brief facts relevant to the present adjudication are enunciated

hereinafter.

3. The respondent/DDA issued Notifications under Section 57 of DDA

Act, providing for fixation of rates for availing Additional FAR provided

under MPD 2021, inter alia, with respect to Institutional Plots. The

petitioner received a communication/demand letter from the

respondent/DDA calling upon it to deposit a sum of Rs 3,98,40,879/-

(Rupees Three Crore Ninety Eight Lacs Forty Thousand Eight Hundred

Seventy Nine only) as charges for sanctioning Additional FAR. However,

the calculation, basis, bifurcation and/or the constituents of the said demand

were not disclosed by the respondent to the petitioner.

4. The petitioner (as well as many other Educational Societies running

schools and colleges) impugned the demand raised by the DDA for

sanctioning Additional FAR as permitted under the MPD 2021, by filing

WP(C) No.14094/2009 with the primary and basic ground of challenge being

that the Notifications dated 10.10.2008 and 23.12.2008 issued by DDA, in its

purported exercise of power under Section 57 of DDA Act, only specify the

rates/amounts for sanctioning of Additional FAR, etc. without any

Regulations having been framed by DDA permitting or authorizing any such

levy in the first place.

5. Vide order dated 20.07.2012, this court disposed of a batch of similar

writ petitions, as filed by the petitioner, taking on record the Notification

dated 17.07.12 proposed to be published in the Official Gazette by DDA

thereby exempting Additional FAR charges in respect of educational

institutions/trusts and other societies having income-tax exemption.

6. WP(C) No.14094/2009 filed by the petitioner also came to be

disposed of by this court on 09.11.2012 relying upon its earlier judgment

dated 20.07.2012.

7. The respondent/DDA then issued the impugned

communication/demand letter dated 12.07.2013 thereby again demanding a

sum of Rs 91,94,049/- on account of purported penalty charges for availing

Additional FAR without sanction.

8. The scope of controversy in the instant case is confined to whether

penalty charges for availing additional FAR without sanction is permissible

in view of the notification dated 17.07.2012 specifying that no additional

FAR charges are to be recovered from Educational Societies/Health care and

Social welfare societies having Income Tax exemption.

9. Counsel for the respondent has argued that the demand of Rs

91,94,049/- has not been made pursuant to item 6(g). It has in fact been made

under the head "Penalty for availing additional FAR" under item 8 which

remains untouched by the notification dated 17.07.2012.

10. Counsel for the petitioner society argues that in view of the order

dated 09.11.2012 passed by this Court in WP(C) No.14094/2009, wherein

the respondent could not dispute that the notification dated 17.07.2012 is

applicable to the present petitioner society, the respondent cannot claim

additional FAR charges subsequently.

11. We have heard arguments on behalf of parties. The notification dated

17.07.2012 is reproduced below:-

"DELHI DEVELOPMENT AUTHORITY LAND COSTING WING VIKAS SADAN INA

NEW DELHI

NOTIFICATION

Subject: Exempting additional FAR charges in respect of Educational institutions/Trusts, Health-care and other social welfare societies etc. having exemption from income-tax.

In exercise of powers conferred by section 57 of the Delhi Development Act, 1957 (No.61 of 1957), the Delhi Development Authority with the previous approval of the Central Government hereby makes the following modification to Notification S.O. 2432(E), dated 10-10- 2008 and S.O. 2955 (E), dated 23-12-2008 published in the Gazette of India, Part II, Section 3, Sub-section (ii) with regard to fixation of rates to be applied for additional FAR charges for Institutional plots. 6(g) for Educational Societies/ Health-care, Social Welfare societies etc. where mode of disposal of land is still allotment.

Accordingly Para 6(g) of these notifications dated 10-10- 2008 and 23-12-2008 shall be amended by the following:

                   SL. No.           ITEM             MODIFIED RATES
                                                       APPROVED BY
                                                       THE MINISTRY

1. Additional FAR charges No additional FAR for Institutional plots. charges to be recovered from 6(g). Educational societies/Health care and Social welfare societies having Income Tax Exemption.

The other contents of the notification dated 23/12/2008 will remain unchanged.

The exemption of additional FAR charges will remain in force till further modification and notification by the Government of India.

File No. F2[163] 07/AO(P)/Pt-II/ Dated: 17 July, 2012

D Sarkar Commissioner-cum-secretary Delhi Development Authority"

12. This notification has amended Item 6(g) of the notification dated

23.12.2008 consequently exempting recovery of any additional FAR charges

from educational societies/health care and social welfare societies having

income tax exemption. Let us now see item 8 of the notification dated

23.12.2008:-

"DELHI DEVELOPMENT AUTHORITY

NOTIFICATION

New Delhi, the 23rd December, 2008

Fixation of rates to be applied for used conversion, mixed land use and other charges for enhanced FAR arising out of MPD-2021

S.O. 2955(E) In exercise of powers conferred by Section 57 of the Delhi Development Act, 1957 (61 to 1957), the Delhi Development Authority with the previous approval of the Central Government, hereby makes the following

Regulations in pursuance to Notification No. S.O.2432(E) dated 10th October, 2008:-

                  S.No.     Item      Recommendation         Rates worked out on
                                      of the Ministry        the basis of the
                                                             recommendations of
                                                             the Ministry (Rates
                                                             in Rs. Per sqm)
                  xxxx    xxxx         xxxx        xxxx      xxxx xxxx       xxxx




                   8.     Penalty     For     commercial For
                          for         industrial/instituti   commercial/industri
                          availing    onal properties @ al/institutional
                          addition    30% as penalty properties @ 30% as
                          al FAR over and above penalty               over    and
                          without     addl.          FAR above         additional
                          sanction    Charges                FAR charges.




                                                      No.F20(4)05/MP/Pt-II/Pt.

V.M.Bansal, Pr. Commissioner-cum-Secy."

13. Item 8 specifies that the penalty for availing additional FAR without

sanction shall be 30% over and above FAR charges. The respondent has

argued that waiving of additional FAR charges from educational societies

does not bar levy of separate charge in the form of penalty as the application

of the amending notification is limited to item 6(g).

14. We do not agree with this argument. As is evident from the

notification dated 23.12.2008, the mode of computing penalty for availing

additional FAR charges without sanction is 30% of such additional FAR

charges. In effect the calculation would work out to be additional FAR

charges plus penalty, which is 30% of the additional FAR charges.

Admittedly, the penalty is not a specified gross sum, instead it is dependent

on the computation of the additional FAR charges. The respondent in all its

wisdom and generosity took the decision to waive additional FAR charges in

case of educational societies/health care and social welfare societies having

income tax exemption. Once this decision was taken, the logical and obvious

corollary is that any penalty imposed for availing such additional FAR

charges without sanction and quantified as 30% over and above additional

FAR charges would stand waived as well. To interpret otherwise would be

opposed to the object of granting the benefit at all.

15. In view of the aforesaid discussion, item 8 in the notification dated

23.12.2008 issued by the respondent does not apply to inter alia Educational

Societies having income tax exemption. Consequently, the demand notice

seeking penalty charges amounting to Rs 91,94,049/- contained in letter No.

F.13 (40)2001/Bldg/292 dated 12.07.2013 issued by the respondent to the

petitioner society herein stands quashed being arbitrary, illegal and contrary

to the notification dated 17.07.2012. The writ petition allowed. There shall

be no order as to costs.

SIDDHARTH MRIDUL, J

BADAR DURREZ AHMED, J

MAY 13, 2014 mk