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2009 DIGILAW 583 (DEL)

D. L. F. Universal Limited v. Union of India

2009-05-14

MADAN B.LOKUR, SIDDHARTH MRIDUL

body2009
MADAN B. LOKUR, J. .1. Three issues arise in this case: (i) Whether the Petitioner is entitled to the conversion of its period lease into a perpetual lease; (ii) If the answer to the first issue is in the affirmative, what is the crucial date for levy of conversion charges; and (iii) Whether the Petitioner is entitled to an increase in the Floor Area Ratio (FAR) upto 250. . In our opinion, the Respondents have no objection to the conversion of the period lease into a perpetual lease. The crucial date for levy of conversion charges is the date of application for conversion and a reasonable period upto 3 months thereafter. Finally, the Petitioner is entitled to an increase of FAR to 250. .2. The predecessor-in-interest of the Petitioner entered into a period lease of twenty years in respect of Plot No. 1-E, Jhandewalan Estate, New Delhi on 27th January, 1948 with the Delhi Improvement Trust (the predecessor-in-interest of the Delhi Development Authority or the DDA for short). The period lease was for a cold storage plant and contained a clause for the exercise of an option to renew it for a further period of twenty years. .This option was duly exercised by the Petitioner and the period lease was to continue till January, 1988. 3. On or about 18th February, 1975, the Petitioner wrote to the Vice Chairman of the DDA that all the plots in the entire Jhandewalan Estate (except Plot No. 1-E and Plot No. 2-E) have been given out on a perpetual lease. It was requested that under these circumstances, the period lease of the Petitioner may be converted into a perpetual lease and if there were any charges payable for this purpose, the same could be discussed and mutually decided. 4. The request dated 18th February, 1975 was followed up by a series of reminders and letters but it seems that the Petitioner did not get any satisfactory response from the DDA, except that the matter was under consideration. 5. Eventually, on 10th January, 1983 the Petitioner wrote to the Vice Chairman of the DDA to the effect that the matter of converting the period lease into a perpetual lease was pending since 1975 and despite a number of discussions and representations, no final conclusion was arrived at. 5. Eventually, on 10th January, 1983 the Petitioner wrote to the Vice Chairman of the DDA to the effect that the matter of converting the period lease into a perpetual lease was pending since 1975 and despite a number of discussions and representations, no final conclusion was arrived at. It was, therefore, requested that in supersession of the earlier requests made, a fresh request for converting the period lease into a perpetual lease with FAR 300 may be considered and granted. 6. The request dated 10th January, 1983 (and subsequent reminders) eventually met with a favourable response from the DDA which, by a letter dated 19th January, 1988 agreed that: (i) A fresh lease be granted to the Petitioner for the Plot bearing No. 1-E, Jhandewalan Estate, New Delhi for a period of 99 years for existing commercial use, and (ii) The fresh renewal would be on the basis of payment of premium at the market rate on the date of offer, that is, Rs.12,788/- per square meter for existing FAR of 139. What is of importance is (iii) If any additional construction is permitted in future, additional premium and ground rent would be chargeable calculated on the basis of land rates prevailing on the date on which permission is granted. In other words, the FAR was not frozen at 139 but could be increased on some specific terms. .7. The Petitioner was of the view that the above terms offered were not reasonable or in accordance with law and that is what led to the filing of the present writ petition. The prayers are for conversion of the period lease into .a perpetual lease (which is, in principle, agreed to by the DDA), an increase in the FAR to 300 (brought down to 250 by learned counsel for the Petitioner) and calculation of the conversion charges as on the date of the application made by the Petitioner, that is, 10th January, 1983 and not 19th January, 1988 as offered by the DDA. 8. There are a few significant and important facts which need to be noticed at this stage:- Firstly, the DDA does not seem averse to converting the period lease into a perpetual lease. This appears from a reading of the letter dated 19th January, 1988. The dispute is only regarding the terms of conversion. 8. There are a few significant and important facts which need to be noticed at this stage:- Firstly, the DDA does not seem averse to converting the period lease into a perpetual lease. This appears from a reading of the letter dated 19th January, 1988. The dispute is only regarding the terms of conversion. That the DDA has no objection to the grant of a perpetual lease is also clear from paragraph 8 of its counter affidavit dated 17th October, 1988 which reads as follows: “8. In reply to paragraph 9 it is submitted that no decision was taken by the answering respondents for grant of perpetual lease hold rights as alleged. In fact, the matter came up before the authority in its meeting held on 20.8.87 and it was decided to recommend to the Government of India for grant of perpetual lease hold rights. The rest of the paragraph is wrong and denied.” Secondly, the DDA is not averse to an increase in the FAR beyond 139 as is clear from the letter dated 19th January, 1988 which mentions that additional construction would be permitted on payment of additional premium and ground rent. Thirdly, there is on record a letter dated 8th June, 1984 issued by the Deputy Land and Development Officer of the Government of India to the DDA on the subject of converting a temporary lease into a permanent lease of plots in Jhandewalan Estate. It is mentioned in the letter that there are no specific guidelines regarding conversion and each case has to be decided on its own merits. Among the factors to be taken into consideration is the date of application for conversion of the temporary lease into a permanent lease. As regards conversion of existing residential building into commercial, payment of additional premium and ground rent is to be calculated on the basis of land values prevailing on the crucial date. The crucial date has been defined as the date of receipt of a complete application for conversion, if the application was received prior to 1st April, 1977. But, if the application was received after 1st April, 1977, the crucial date would be three months from the date of receipt of the complete application or the date of permission for change, whichever is earlier. But, if the application was received after 1st April, 1977, the crucial date would be three months from the date of receipt of the complete application or the date of permission for change, whichever is earlier. It was specifically mentioned in the aforesaid letter that the purpose of laying down the crucial date is that the lessee should not be made to suffer on account of administrative delays in working out the details of charges etc. 9. The first question that arises for our consideration is whether the period lease of the Petitioner can be converted into a perpetual lease. As mentioned above, there does not seem to be any dispute in this regard. While it may be that the Petitioner cannot insist on a conversion as a matter of right, the fact remains that the DDA has no objection to the conversion ? subject to the payment of requisite charges. We are, therefore, proceeding on this basis. 10. The second question that arises is this: What is the crucial date or the date which would be applicable in the case of the Petitioner for the purposes of levying conversion charges and additional premium etc. We have already noted the letter dated 8th June, 1984 issued by the Deputy Land and Development Officer to the DDA wherein it is mentioned that the crucial date would be three months after the receipt of a complete application for conversion, if the application for conversion was made after 1st April, 1977. In the present case, the application for conversion was made on 10th January, 1983 and, therefore, the land rate applicable would be three months thereafter, that is, of 10th April, 1983. 11. While it is true that the letter dated 8th June, 1984 refers to conversion of residential plots to commercial use, there is nothing to limit the terms of the letter to residential plots only. Generally, for the conversion of a temporary lease into a permanent lease, no specific guidelines have admittedly been laid down. However, some factors are required to be taken into consideration, such as, unauthorized occupation, re-entry, determination of temporary lease, land use shown in the zonal/master plan and the date of application requesting for conversion of a temporary lease into a permanent one. There is no adverse application of any of these factors to the case of the Petitioner. However, some factors are required to be taken into consideration, such as, unauthorized occupation, re-entry, determination of temporary lease, land use shown in the zonal/master plan and the date of application requesting for conversion of a temporary lease into a permanent one. There is no adverse application of any of these factors to the case of the Petitioner. Therefore, the principle laid down in the letter dated 8th June, 1984 that the date of application requesting for conversion of a temporary lease into a permanent one would be applicable to the Petitioner. .12. In this regard, the case set up by the DDA in its counter affidavit is of some significance, which is that the Petitioner?s period lease did not provide any clause for its conversion into a perpetual lease and, therefore, the question of conversion would arise only after the expiry of the period lease. We do not see how this follows. There is nothing in the period lease prohibiting the Petitioner from making an application for conversion during its currency. That being so, the Petitioner did make an application on 10th January, 1983. The DDA was entitled to reject the application on the ground taken in the counter affidavit but did not ? it kept the application pending, inviting the principle mentioned in the letter dated 8th June, 1984 that a lessee should not be made to suffer on account of administrative delays in working out the details of charges payable. Therefore, we are of the opinion that if the application of the Petitioner for conversion is required to be favourably considered by the DDA, the land rate should be as on 10th January, 1983 plus three months thereafter, that is, 10th April, 1983. This is the crucial date in so far as the case of the Petitioner is concerned. 13. Our attention has been drawn by learned counsel for the Petitioner to a decision of the Supreme Court in Union of India v. Dev Raj Gupta, (1991) 1 SCC 63 . In paragraph 13 of the Report, the Supreme Court concluded that the application for conversion was made by the respondent therein on 27th February, 1981. In paragraph 15 of the Report, it was noted that the competent authority had calculated additional premium with reference to 27th May, 1981 which is three months from the date of receipt of the application. In paragraph 13 of the Report, the Supreme Court concluded that the application for conversion was made by the respondent therein on 27th February, 1981. In paragraph 15 of the Report, it was noted that the competent authority had calculated additional premium with reference to 27th May, 1981 which is three months from the date of receipt of the application. The Supreme Court noted that the period of three months was really the outer limit for processing the application and there is no reason for the competent authority to actually wait till the last moment and not process the application earlier. In the case that we are concerned with, learned counsel for the Petitioner did not insist on any explanation being given by the DDA for not processing the application before the outer limit of 10th April, 1983. He was quite content to wait for three months time being given to the DDA to process the application. That being the position, the crucial date, in so far as the present case is concerned, would be 10th April, 1983 which is three months after the date of the application made by the Petitioner. .14. We may note that Dev Raj Gupta also pertained to the conversion of a residential plot to commercial use. But, in the absence of any guidelines (other than the factors mentioned in the letter dated 8th June, 1984) we have no option but to fall back on the principle laid down in that letter as well as the decision of the Supreme Court to conclude that the crucial date for conversion of a period lease into a perpetual lease would be three months after the receipt of a complete application by the DDA. 15. Looked at from another point of view, the date of grant of permission by the DDA cannot be taken as the crucial date for two reasons. Firstly, administrative delays in processing an application for conversion would work to the prejudice of the applicant. This is what is sought to be prevented by the letter dated 8th June, 1984. Secondly, the letter dated 8th June, 1984 itself specifically mentions that a period of three months or the date of grant of permission, whichever is earlier, should be taken as the crucial date. This is what is sought to be prevented by the letter dated 8th June, 1984. Secondly, the letter dated 8th June, 1984 itself specifically mentions that a period of three months or the date of grant of permission, whichever is earlier, should be taken as the crucial date. Therefore, under no circumstances can it be said that a date later than 10th April, 1983 should be taken for the purposes of calculating the conversion charges payable by the Petitioner. 16. The impugned letter dated 19th January, 1988 does not reject the request of the Petitioner ? in fact, it agrees to the conversion of the period lease into a perpetual lease. However, the terms and conditions offered in that letter are not in consonance with the letter dated 8th June, 1984 issued by the Deputy Land and Development Officer to the DDA nor are they in consonance with the interpretation of law given by the Supreme Court in Dev Raj Gupta, both of which have been interpreted by us as explained above. To this extent the impugned letter dated 19th January, 1983 is quashed. 17. Learned counsel for the DDA sought to rely on Dev Raj Gupta & Ors. v. New Delhi Municipal Committee & Ors., 68 (1997) DLT 62 (DB) to suggest that the law laid down by the Supreme Court in 1991 in Dev Raj Gupta had been interpreted in a manner different from what was suggested by learned counsel for the Petitioner. We have gone through the Division Bench judgment of this Court and we find that the issue raised therein is completely different from what was raised before the Supreme Court. In fact, in paragraph 2 of the Report, the Division Bench noted that the dispute regarding payment of conversion charges leviable by the DDA is settled by the judgment of the Supreme Court. What was decided by the Division Bench related to the sanction of the proposed building plan by the New Delhi Municipal Committee. This has absolutely nothing to do with the issue of the quantum of conversion charges. Similarly, reliance on State of West Bengal v. Terra Firma Investment & Trading Pvt. Ltd., (1995) 1 SCC 125 is also misplaced because that too pertains to the sanction of building plans and not to conversion charges. 18. This has absolutely nothing to do with the issue of the quantum of conversion charges. Similarly, reliance on State of West Bengal v. Terra Firma Investment & Trading Pvt. Ltd., (1995) 1 SCC 125 is also misplaced because that too pertains to the sanction of building plans and not to conversion charges. 18. The third question for our consideration is whether the Petitioner is entitled to an increase in the FAR upto 250 in respect of the plot in its possession. 19. In this connection, it may be mentioned that the Master Plan for Delhi 1962 prescribes in Chapter II (zoning and sub-Division Regulations), A.5 clause IV (b) (as amended) the FAR for several already built up commercial areas. One of them is Jhandewalan Scheme Block E. The Master Plan provides that the permissible coverage would be as per the existing Building Byelaws of the Municipal Corporation of Delhi, that is, 80% on the ground floor, 70% on the first floor and so on with an FAR of 150 for a two storeyed construction, an FAR of 200 for a three storeyed construction and an FAR of 250 for a four storeyed construction and so on provided the FAR does not exceed 300. 20. Learned counsel for the Petitioner has brought to our notice the relevant clause in the period lease relating to construction in the plot of land in the possession of his client. Clause V of the period lease as renewed in 1968 shows that a part of the land could be used for the construction of a ground and first floor for cold storage and the second and third floor for offices. On this basis, it was submitted that the Petitioner would be entitled to an FAR of 300 but learned counsel specifically stated before us that he was limiting his claim to an FAR of 250 only. 21. With respect to the Master Plan for Delhi 2001 notified on 1st August, 1990, learned counsel for the Petitioner submitted that the admitted position is that the FAR of 125 has been prescribed for a District Centre, and that is in relation to an integrated plan and not for individual plots. A District Centre has several components such as landscape, facilities, commercial offices, service centre, cultural complex etc. A District Centre has several components such as landscape, facilities, commercial offices, service centre, cultural complex etc. The FAR of 125 prescribed for an integrated plan of a District Centre includes the above requirements apart from roads, lanes, parks, parking space etc. In other words, the submission of learned counsel for the Petitioner was that whether the case of the Petitioner is considered under the Master Plan for Delhi 1962 or the Master Plan for Delhi 2001, the Petitioner is entitled to a much higher FAR for its individual plot rather than the FAR of 139 agreed to by the DDA. 22. Learned counsel for the Petitioner buttressed his submission by drawing our attention to an auction conducted by the DDA in October, 1994 (advertised in the newspaper on 29th September, 1994) where the FAR permitted in Block E in Jhandewalan Estate was as high as 800. Learned counsel also drew our attention to some questions raised by the Petitioner under the Right to Information Act, 2005. In reply to a query, it was stated by the DDA that as per the Master Plan for Delhi 1962, the FAR of Jhandewalan District Centre is 150 and as per the Master Plan for Delhi 2001 the FAR is 125. In response to another query under the Right to Information Act, 2005 the DDA acknowledged on 29th March, 2007 that the FAR of 125 is based on the integrated plan for the entire District Centre. In response to another pointed query under the Right to Information Act, 2005 the DDA stated on 5th June, 2007 that in every Master Plan, the FAR is prescribed for the whole District Centre and not for an individual plot in the District Centre and where the FAR prescribed is 125 for the integrated scheme of the District Centre, the FAR of the (individual) plot may be higher than 125. 23. In our opinion, on the basis of these facts, namely, that the FAR as per the Master Plan for Delhi 1962 may be upto a maximum of 300 for Jhandewalan Estate, or it may be 125 for the integrated plan as per the Master Plan for Delhi 2001, the FAR for individual plots could be more than 150/125, as the case may be. Add to this the fact that the FAR at least in the auctioned individual plot in Jhandewalan Estate is about 800, we are of the opinion that the Petitioner is quite justified in asking for an FAR of 250 in respect of its plot. We may add that nothing has been shown to us by the DDA to suggest that the request made by the Petitioner for FAR of 250 for its individual plot is in any manner unreasonable or contrary to the Master Plan for Delhi either of 1962 or of 2001 or of 2021. We, therefore, hold that the Petitioner would be entitled to an FAR of 250 for the plot of land as requested by it in its letter dated 10th January, 1983. 24. In its affidavit filed in August, 1997 the DDA sought to justify its refusal to increase the FAR beyond 139 in the following words in paragraph 3.4 and 3.5 thereof: ?3.4 It may further pointed out that in the Master Plan 2001 the FAR permissible in respect of the area in question, which has been made into a Center is 125. It is not possible, legally and otherwise to agree to the increase in the FAR in respect of the building. It need hardly be emphasized that the FAR prescribed in the Master Plan of Delhi is worked out on the basis of considerations relating to planning and in particular by keeping in consideration the traffic, road carrying capacity and other services available and enjoyed in a particular area in question. 3.5 That in view of what has been stated above, it is respectfully submitted that the Delhi Development Authority has taken a decision that increased FAR cannot be granted to the Petitioner and consequently no construction in terms of such increased FAR can be raised.? Unfortunately, learned counsel for the DDA has not been able to point out anything to suggest why in law or otherwise the FAR of 250 cannot be permitted in the case of the Petitioner while it can be permitted in the case of others, especially through a public auction. We are, therefore, not inclined to accept the ipse dixit of the DDA in this regard. We are, therefore, not inclined to accept the ipse dixit of the DDA in this regard. It may also be noted that the Petitioner is not asking for a change in the FAR of the District Centre as a whole or a change of the FAR in the integrated plan but is concerned only with an individual plot. To this extent, the affidavit for the DDA filed in August, 1997 does not deal with the actual grievance of the Petitioner. While it may be possible that the FAR for the entire District Centre cannot be changed from 150/125, that is not what the Petitioner is asking for. 25. Finally, in this regard, the plea of the DDA that the FAR cannot be increased in view of considerations relating to planning, traffic, road carrying capacity and other services enjoyed is apparently specious. This is because the DDA has itself acknowledged, in its letter dated 19th January, 1988 that the FAR could be increased beyond 139 on payment of additional premium and ground rent on the basis of land rates prevailing on the date permission for conversion is granted. In other words, the FAR of 139 was not immutable and considerations relating to planning, traffic, road carrying capacity etc. could be given a go-bye on payment of appropriate charges. 26. On a conspectus of the facts and law before us, we are of the opinion that learned counsel for the Petitioner has made out a case for the grant of relief as prayed for, namely, to convert the Plot bearing No. 1-E, Jhandewalan Estate into a perpetual lease on payment of conversion charges with the land rates as on 10th April, 1983 and an FAR of 250. The objections raised by learned counsel for the DDA are, in our opinion, without any substance. Payments made by the Petitioner pursuant to interim orders passed by this Court will be adjusted against the charges due. 27. The writ petition is allowed to the extent mentioned above. No costs.