Nath International Corporation v. Delhi Development Authority

14. Learned counsel for the petitioner firm has urged that the Demand Letter is unsustainable in law on multiple grounds, including its inconsistency with the office notings, the building plan sanctioned by the respondent/DDA, and the policy dated 26.03.2010, governing the DDA. Additionally, it is submitted that the Demand Letter constitutes a completely non-speaking determination, lacking any justification or explanation. Inviting the attention of the Court to order dated 20.11.2019, it is submitted that no action was taken by the respondent/DDA towards the implementation of the aforesaid order until 08.01.2020, when a meeting was conducted in regard to the levying of the misuse charges in respect of the subject premises of the petitioner firm.

15. It is vehemently pointed out that as neither the conversion of the subject premises nor the withdrawal of the Demand Letter was undertaken by the respondent/DDA in accordance with the terms, of the order dated 20.11.2019, the petitioner was compelled to file an application bearing No. CM. Appl. 2779/2021, and this Court passed an order directing the respondent/DDA to comply with the directions outlined in the order dated 20.11.2019. Subsequently, the respondent/DDA passed a speaking order on 12.02.2021, wherein it stated that that approval to process the conversion application, which was granted during a personal meeting held on 08.01.2020 and further supported by the prior approval given by the Commissioner (LD) on 28.04.2016, was subsequently withdrawn arbitrarily. Additionally, a file noting from 1995 allegedly highlighted that the FAR[5] of the mezzanine floor, as recorded in the sanctioned drawing, exceeded the Floor Area Ratio permissible FAR limit under the BBL[6] 1983 policy. Consequently, the matter was referred to the respondent/DDA's vigilance department on the grounds of alleged file tampering with malafide intent. The petitioner firm further asserts that as per the speaking order, a legible copy of the sanctioned plan was sought to calculate misuse charges relating to the use of the mezzanine floor as office space. Moreover, it is alleged that a SCN was issued in 1996; however, the respondent/DDA’s records do not contain any evidence of the same. The speaking order also stated that the respondent/DDA will reexamine misuse data of the mezzanine floor, misuse charges of the basement floor, and other charges after receipt of the sanctioned building plan.

16. As regards the speaking order dated 12.02.2021, it is submitted that the order dated 20.11.2019 of this Court directed the processing of the conversion application notwithstanding the demand letter sent by the respondent/DDA. However, as stated in the speaking order, this has not been done by the respondent/DDA. Instead, and surprisingly, the approval dated 28.04.2016 given by the Commissioner (LD) and the approval dated 08.01.2020 given by the Director (Indl.) have been withdrawn. The respondent/DDA, being the custodian of the documents, is again seeking the submission of a sanctioned building plan, claiming not to possess a legible copy. However, it is submitted that the petitioner firm has submitted a copy of the sanctioned plan four times in the past twelve years, and it is also part of the documents filed with the petition. No evidence or document has been brought Building Bye-Laws forth to substantiate allegations of ‘file tampering with malafide intent,’ and, without prejudice, the same cannot pertain to the petitioner firm. The alleged tampering of the file is an internal issue of the respondent/DDA and is unrelated to the petitioner firm.

17. Furthermore, no evidence or document has been provided to establish the existence of the 1996 SCN, and the respondent/DDA’s own documents deny its existence. Reliance is placed upon R.L. Sethi v. Union of India[7] and Hira Lal Singh v. The Land Development Officer, Land & Development Office[8], and it is submitted that the respondent/DDA is restricted from raising demands after a delay of close to 17 years in issuing a SCN and 22 years since the alleged recording of the misuse charges.

18. It is pointed out that the petitioner was compelled to file another application, CM Appl. No. 32602/2021, whereby they sought to deposit Rs. 20.34 lakhs, as demanded in the Demand Letter, as a without-prejudice payment to expedite the matter and facilitate the conversion of the property into freehold. On 21.09.2021, this Court permitted the petitioner to deposit the amount and directed the respondent/DDA to respond to the application. Instead of complying with the Court's repeated orders and adhering to office notings and the sanctioned plan, the respondent/DDA filed an additional affidavit dated 27.11.2021, in which a fresh Demand Notice for Rs. 60.64 lakhs as misuse charges were imposed claiming that the 2014 policy was misapplied to the petitioner’s case when the 2010 policy should have

2017 SCC OnLine Del 9918 been applied. The respondent further contended that, under clause i(II) of the 2010 policy, the SCN is “deemed” to have been issued to the petitioner firm.

19. Per contra, learned Standing Counsel for the respondent/DDA submits that an inspection of the subject premises was conducted on 23.08.2013. Following this, on 04.10.2013, the respondent/DDA issued a SCN regarding the misuse of the mezzanine floor as office space, which amounted to a violation of the terms of the lease deed. Additionally, it was noted that the mezzanine floor was not part of the permissible FAR for construction on the plot, thereby breaching clause II (12) of the lease deed and attracting the levy of misuse charges. Subsequently, the misuse charges were calculated based on the approved misuse area of 36.74 sqm for the mezzanine portion, amounting to Rs. 11,17,230/. The respondent/DDA further states that the demand letter dated 26.09.2018 sent to the petitioner clearly specified the total payable amount of Rs. 20,34,832/-, including these charges. The misuse charges were calculated in accordance with the misuse policy dated 26.03.2010. The respondent/DDA clarifies that the misuse policy referenced by the petitioner, bearing No. F. (1)/2014-coord. (LD)/DDA/32 dated 22.04.2014, was withdrawn as its validity was limited to a six-month period.

20. The respondent/DDA submits that they had complied with the order dated 20.11.2019 of this Court and had accorded a personal hearing to the AR[9] of the petitioner’ firm on 08.01.2020 with the Director (Indl.). Subsequently, a joint inspection was conducted by LSB(I), Engineering Department & Legal Department on 09.02.2021 and as per the report, it was found that the basement of the subject premises was used for storage and no office was found on the mezzanine floor and the first floor of the subject premises was found to be locked during the inspection.

21. It is further contended by the respondent/DDA that another meeting was held under the chairmanship of the Commissioner (LD) on 11.02.2021, with officials of the DDA and the petitioner firm in attendance. During this meeting, the Deputy Director (Building) informed that the sanctioned plan available with the respondent/DDA was not legible. Consequently, the AR of the petitioner firm was requested to provide a legible copy of the sanctioned plan to facilitate further deliberations on revising misuse charges for the mezzanine floor. Additionally, misuse charges for the basement, which was reportedly being used for industrial activity as noted in the inspection report dated 12.02.1996, were also to be reviewed after receipt of the sanctioned plan. In compliance with the order dated 20.11.2019 of this Court, a Speaking Order was passed on 12.02.2021.

22. The respondent/DDA further states that the petitioner firm sublet the basement and mezzanine floor to Universal Turbo, in violation of the terms of the lease agreement. Subletting charges for the basement floor, covering an area of 152.[2] sqm, were calculated for the period from 12.02.1996 to 18.10.2005, amounting to Rs. 3,88,440/-. A demand letter dated 26.09.2018 was issued to the petitioner firm requiring payment of these subletting charges along Authorized representative with other outstanding dues. Additionally, the respondent submits that in CM Application No. 32602/2021, the petitioner firm provided an undertaking stating that “in the event there is any other amount which, in accordance with law, may be required to be paid to effectuate the conversion, the petitioner would, without prejudice to its rights and contentions, deposit the same with this Hon’ble Court within one week of being informed by the respondent.” This Court, vide order dated 21.09.2021, recorded the statement of the learned Senior Advocate for the petitioner firm that the petitioner firm is willing to indemnify the respondent/DDA against any third-party claims. Therefore, the respondent/DDA issued a demand letter dated 26.09.2018 for Rs. 20,34,832/- to the petitioner firm, subject to final review and verification by the Finance Department. The amount was erroneously calculated based on the misuse policy dated 22.04.2014, which was valid only for six months. Subsequently, the Finance Department reevaluated the misuse charges under the misuse policy dated 26.03.2010, determining them to be Rs. 17,38,166/- for the basement and Rs. 25,55,231/- for the mezzanine floor.

23. Lastly, the respondent/DDA urges that the petitioner firm should not be excused solely due to the delay in issuing the SCN. The sanctity of contractual obligations must be maintained, and procedural delays do not absolve the petitioner firm of its responsibilities. Consequently, a demand letter dated 23.11.2021 was sent to the petitioner via email, requiring payment of Rs. 40,30,490/- towards outstanding dues within 30 days of its issuance.

ANALYSIS AND DECISION

24. I have given my thoughtful consideration to the submissions advanced by the learned counsels for the parties at the Bar. I have also perused the relevant record of the case.

25. First things first, it is admitted fact that the building plan was sanctioned by the respondent/DDA on 05.01.1988, which stipulated that the usage to be: • storage for basement floor; • industrial use for ground floor; • office use for mezzanine floor: and • storage in case of first floor.

26. It is also admitted fact that on approval by the respondent/ DDA, a perpetual lease deed of the amalgamated subject properties was executed between the parties on 03.05.1990. It is also admitted fact that first inspection of the subject property was carried out on 12.02.1996, whereby it was allegedly found that basement was being used for industrial use, which had been sub-let to Universal Turbo and the mezzanine floor was being used for office space. It is also admitted fact that no SCN was issued by the respondent/DDA with regard to such misuser and though a second inspection was then conducted on 18.10.2005, the report of the inspection did not bring out any case of misuse of the basement other than storage and/or for that matter the use of the mezzanine floor for the purpose of other than office.

27. It is also borne out from the record that the petitioner firm applied for conversion of the subject property from leasehold to freehold on 29.06.2010 and paid the requisite conversion charges and inspection consequent thereto was again carried out by the officials of the respondent/DDA on 21.10.2010, wherein it was recorded that the mezzanine floor was used for office. It appears that a notice dated 30.05.2011 was issued, whereby consequent to application for conversion moved by the petitioner firm, it was called upon by the respondent/DDA to furnish copies of the documents showing tenancy in favour of Universal Turbo, to which reply was given dated 04.07.2011 inter alia pointing out that Universal Turbo is a company promoted by two partners of M/s. Nath International Corporation, commonly namely, Vijendra Nath and Jitender Nath as equal Directors and a copy of the Memorandum of Association was also submitted. It is also admitted fact that 4th inspection was done on 23.08.2013 and again no misuse was found qua the basement and the mezzanine floor and it was for the first time SCN dated 04.10.2013 was issued, whereby misuse of the subject property was alleged completely overlooking the findings of the earlier inspection report dated 23.08.2010 and based on some 5th inspection dated 01.11.2010. The SCN dated 04.10.2013 was replied by the petitioner vide letter dated 16.12.2013.

28. At this juncture, it may be noted that it is the case of the petitioner firm that a new policy had been brought with regard to the imposition of misuse charges by the respondent/DDA w.e.f. 26.03.2010. However, the fact of the matter is that there was an exchange of correspondence between the parties, as well as meetings, apparently from 2013 till 2018. Eventually, the impugned demand towards misuse charges dated 26.09.2018 was imposed by the respondent/DDA, which was assailed in the present writ petition instituted on 12.12.2018.

29. In the said backdrop, it is a matter of record that the whole controversy was set at rest by this Court vide order dated 20.11.2019. It would be expedient to reproduce the aforesaid order in toto so as to understand the decisive stage of the present matter, which goes as under:

8. Mr. Anish Dayal, who, appears on behalf of the petitioner firm says that the petitioner firm which is run by two persons are senior citizens.

9. The record shows that the authorised representative of the petitioner is, one, Sh. Jitendra Nath who in 2018 was aged 74 years.

10. The grievance of the petitioner firm briefly is, that despite having deposited the charges for conversion of the subject property from lease hold to free hold as far back as in 2010, the respondent DDA has not passed an order of conversion.

11. Mr. Dayal says that nearly three years after the petitioner firm had approached the respondent DDA with a request for conversion, it was issued a show cause notice dated 04.10.2013 (in short “2013 SCN”).

12. Via the 2013 SCN, the respondent DDA called upon the petitioner firm to show cause as to why misuser charges ought not be levied on the petitioner firm for using the mezzanine floor as an office and for misusing the various other portions of the subject premises as well as for sub-letting the basement of the subject premises to an entity by the name Universal Turbo Private Limited (in short “UTPL”).

13. The petitioner appears to have filed a reply to the same which is dated 16.12.2013. 13.[1] In the reply, the petitioner firm adverted to the fact that they had obtained a sanctioned building plan. 13.[2] It was specifically pointed out that the approval qua the plan which permitted use of mezzanine floor as office space had been granted by the DDA on 05.01.1988. Copy of the building plan and the sanction letter were enclosed with the reply.

14. Insofar the aspect relating to sub-letting was concerned, Mr. Dayal informs me that since that was not articulated in those many words in the 2013 SCN, the answer to that can be found in the communication dated 04.07.2011 which is marked as Annexure P and is available on page 150 of the paper book.

15. As per this communication, the petitioner firm appears to have taken the stand that UTPL was a company which was promoted by the very same gentlemen who were partners in the partnership firm. The petitioner firm also attempted to convey that the partners who were directors had equal shares in UTPL.

16. The record also shows that besides this, the petitioner firm also took recourse to the RTI route and obtained information which, in my view, would impact the result of this case one way or the other.

17. The notings which Mr. Dayal has referred to in particular are those which are appended on pages 249, 251, 254 and 258 of the paper book. 17.[1] For the sake of convenience, the same are extracted hereafter:- “107/N As per approval of Comm/LD _____ 28.4.2016 on pre page may kindly be seen. Now if agreed we may send this file to AO/IL for issue no due certificate to the effect that nothing is outstanding against the unit. The processing sheet in placed at page 61-62. A.O/A.A.O./L.S.A

Date 3-5-16 Opinion of Building Department NP-99: As per sanctioned Bldg. Plan Mez. Floor is marked as office with an area of 34.64 sqm. However, the same is not part of sanctioned FAR. Hence in view of the above facts and details/clarifications, Competent Authority vide its orders dated 28.4.2016 (NP-106) has approved the following: "We may process the conversion case of the unit without charging the misuse charges on account of use of Mez. Floor as office in view of the Sanctioned Bldd Plan and in view of minutes dated 19.10.20l[5] recorded at NP-101” Hence in view of above, facts and details, we may again refer the file to finance wing for issuance of No dues certificate to this effect that nothing is due against the property in question. Submitted please. Asstt. Director (Indl.) Dy. Director (Indl.) Director (Indl) Director (L.C.) It is submitted that site of plot was inspected on 12.2.1996 (P58/N),18.10.2005 122(CP) and misuse was reported both the times, but due to non-availability of SCNs in the file, no misuse has been levied as per terms of circular (i) I of 26.3.2010. As per noting dated 14.2.96, the SCN was to be issued, but no notings for the period 16.2.96 to 12.10.2005 is available in the file and no SCN is available in the file with the result the misuse cannot be levied. The Commissioner (LD) vide his note dated 28.4.2016 at page 106/N has decided that even the misuse of Mez floor as office as already decided and worked out is not recoverable on account of the sanctioned building plan. In view of the poor condition of file and the fact that there is provision for office in the sanctioned building plan, it is felt that we may not have any other option, but to drop the misuse charges as worked out for Rs. 11,17,230/- which otherwise would also have been reduced to 50% after rebate as per circular dated 4.8.2015. Since the area of Mez floor is not the part of the permissible/sanctioned FAR as per the sanctioned drawing, the matter regarding levy of any other charges because this area was not counted in the FAR may be seen by the M/wing. Submitted please. Director (LC) P-106/N The last inspection was carried out on 26.08.2013 (CP-249), wherein it was found that the mezzanine floor is used for storage. Hence, misuse is not leviable since the same falls in the category of I(i) of Circular dated 26.03.2010. Hence in view of the above facts”

18. A perusal of the aforementioned notings would show that even according to the respondent DDA because show cause notices were not issued, after inspections carried out on 12.02.1996 and 18.10.2015 which revealed misuse and on account of plans being sanctioned allowing use of mezzanine floor as office space which otherwise was used for storage, it was not sanguine about sustaining a demand for misuser charges.

19. The difficulty, however, which the Court is faced with is that the respondent DDA has not filed a counter affidavit and if one were to take recourse to the strict rules of pleadings then everything that the petitioner had said in the petition, since it has not been transversed, will have to be accepted.

20. However, since it involves revenue, I intend to dispose of the writ petition with following directions:

(i) The respondent DDA will process the application of the petitioner firm for conversion, given the fact that parties have deposited the requisite amount as far as back as in 2010, notwithstanding the issuance of the impugned demand notice dated 26.09.2018.

(ii) The respondent DDA will accord a personal hearing to the authorised representative of the petitioner firm with regard to impugned demand and take a decision in the matter.

(iii) While taking a decision in the matter, the respondent DDA will bear in mind its own notings in the file concerning the petitioner firm. In particular, the notings which have been referred to herein above.

(iv) Besides this, the respondent DDA will also keep in mind its extant mis-use policy; the copies/extracts of which are appended on pages 216 to 219 of the petition.

(v) The authorised representative of the petitioner firm will attend the office of the concerned officer on 02.12.19 at 11:00 am. In case, the date fixed hereinabove is not convenient to the officer, he will fix a date which is proximate to the date fixed by the Court.

(vi) The concerned officer will pass a speaking order. A copy of which will be furnished to the petitioner firm and will also be placed before the Court prior to the next date of hearing.

21. Renotify the matter for compliance on 20.12.2019.

22. Needless to add, in case the petitioner firm is aggrieved by the decision taken by the concerned officer, it will have liberty to take recourse to an appropriate remedy as per law.”

30. It appears that since the aforesaid directions were not complied with, the petitioner firm preferred CM APPL. 2779/2021, and thereafter, a speaking order was passed dated 12.02.2021, which was intimated to the petitioner firm and reads as follows: “DELHI DEVELOPMENT AUTHORITY LAND SALES BRANCH (INDUSTRIAL) A-BLOCK, INA, NEW DELHI No.F.5(89)83/LSB(I)//9/3 Dated: 12/2/21 Speaking Order To Sh. Jitendra Nath, Partner, M/s. Nath International R/o A-1/295, Safdarjung Enclave, New Delhi 110029. Ref.: Order dated 20/11/2019 of the Hon'ble High Court in WP(C) No.13388/2018 titled "Nath International Corporation Vs DDA." Whereas Plot No. D-86/1 ad-measuring 200 sqm. Okhla Industrial Area Ph.I & Plot No. D-87 ad-measuring 200 sqm. Okhla Industrial Area Ph.I were allotted to M/s. Nath International Corporation (hereinafter called "petitioner firm").

2. Whereas amalgamation of both the plots (D-86/1 & D-87 Okhla Industrial Area Ph.l) (hereinafter called "the said plot") were approved by VC, DDA vide note dated 07.10.1987 and conveyed to petitioner firm vide letter dated 15.10.1987. Accordingly, lease deed of amalgamated plot was executed on 03.05.1990.

3. Whereas a site inspection was carried out on 12.02.1996 wherein it was found that basement was being used for Industrial Activity and basement was subletted to M/s. Universal Turbo Pvt. Ltd. Mezzanine Floor was being used for office purpose also.

4. Whereas it is further observed on perusal of file at P-58/N that, the inspection report submitted by J.E.(I) on 12.02.96 wherein it has been mentioned that SCN may please be issued and in last line it has been written "continue pages" but no pages in continuation in noting side were available on record till dated 13.10.2005. The new noting at P-59/N is available on file on 13.10.2005 i.e. after gap of 9.[5] years. The show cause notice was ordered to be issued on 14.02.1996 but same is not available on record. Merely nonavailability of show cause notice in correspondence side does not mean that show cause notice was not issued and inspection report is not correct.

5. Whereas petitioner firm vide letter dated 07.10.2005 requested for permission to mortgage of the said plot. Therefore, another site inspection was conducted on 18.10.2005 wherein it was found that basement was being used for storage purpose and mezzanine floor was being used for office purpose.

6. Whereas clause II(10) of perpetual lease deed inter-alia states that, "The lessee shall in all respects comply with and be bound by the building, drainage and other bye-laws of the proper municipal or other authority for the time being in force."

7. Whereas petitioner firm had applied for conversion of said property on 29.06.2010 in DDA.

8. Whereas as per the circular dated 26.03.2010 regarding misuse, "cases where complaints / report about misuse is available on file and show cause notices were issued but there was no response from the allottee, a fresh site inspection to be done."

9. Whereas misuse was available on file and direction for issuance of show cause notice was given on 14.02.1996 but no reply was available on record, therefore, a site inspection was conducted on 21.10.2010 wherein it was found that basement was being used for storage purpose and mezzanine floor was being used for office purpose.

10. Whereas another site inspection was again carried out on 26.08.2013 wherein it was found that basement and mezzanine floor were being used for storage purpose.

11. Whereas show cause notice dated 04.10.2013 was issued to petitioner firm regarding misuse of mezzanine floor being used as office purpose.

12. Whereas petitioner firm in its reply dated 22.01.2014 in response of show cause notice dated 04.10.2013 itself agreed that mezzanine floor is being used as office purposes as per sanctioned building plan dated 05.01.1988.

13. Whereas, as per extant policy of DDA, Misuse charges are leviable on account of misuse of said plot. Accordingly, a demand dated 26.09.2018 was issued to petitioner firm for misuse charges (mezzanine floor being used as office purpose), balance conversion charges, subletting charges, ground rent charges, interest on ground rent and interest on balance conversion charges amounting to Rs. 20,34,832/- subject to final review / verification of payment and dues by the Finance Department.

14. Whereas Hon'ble High Court vide order dated 20.11.2019 in WP(C) 13388/2018 in the matter of Nath International Corporation Vs DDA wherein Hon'ble Court had directed DDA to accord a personal hearing to authorized representative of petitioner firm and will process the application of the petitioner firm for conversion.

15. Whereas a personal hearing was given by the Director (Indl.) on 08.01.2020 at 11.00 Α.Μ. wherein it was decided that, as the case is covered under category I(i) of circular dated 26.03.2010, no misuse charges are to be levied. Minutes of the meeting were sent to partners of M/s. Nath International Corporation vide letter dated 10.02.02020. Further, it was decided that matter may be referred again to the Finance Wing for reviewing the misuse charges.

16. Whereas the file was referred to Finance Wing on 10.02.2020 and Finance Wing vide note dated 17.02.2020 intimated that the issue regarding misuse of basement and mezzanine floor needs further deliberation.

17. Whereas Building Department vide note dated 24.09.1995 intimated that the FAR of mezzanine floor recorded in sanction drawing but it is over and above the permissible FAR as per BBL 1983 and policy of the mezzanine at that time.

18. Whereas another meeting was held on 20.02.2020 in the Chairmanship of Director (Indl.) wherein it was recorded by the Dy. Director, LSB(I) that it is a case of tampering of file with malafide intent and matter may immediately be referred to Vigilance Department, DDA and the Hon'ble Court may be informed about this recent development.

19. Whereas, in view of deliberation made in the meeting held on 20.02.2020, the Commissioner (LD) vide note dated 25.02.2020 had withdrawn/cancelled his earlier approval dated 28.04.2016 of proposal for proceeding the conversion cases without charging of misuse charges on account of use of mezzanine floor as office purpose.

20. Whereas in the meeting held on 20.02.2020, petitioner firm was not called and new development has been deliberated in the said meeting and earlier approval regarding non-levy of misuse charges was withdrawn. Therefore, another personal hearing was given to the petitioner firm on 11.02.2021.

21. Whereas, in the personal hearing, the issue of misuse charges levied on mezzanine floor being used as office purpose as per sanctioned building plan was deliberated in detail. Dy. Director (Building) had intimated that the sanctioned plan which is available in file, area statement along with FAR is not legible. Due to illegible copy of the said plan, the issue of misuse charges levied on mezzanine floor could not be further examined.

22. Whereas, it was requested to representative of petitioner firm to provide a legible copy of the sanctioned building plan to DDA.

23. Whereas, demand raised vide letter dated 26.09.2018 includes only misuse charges of mezzanine floor, subletting charges of basement and other dues but no misuse charges was levied of basement being used for Industrial Activity as found in the inspection conducted on 12.02.1996.

24. Whereas, Hon'ble court has also directed DDA to keep in mind its own noting in the file concerning the petitioner firm. In particular, the noting which has been referred to herein above, beside this DDA will also keep in mind extant misuse policy.

25. Therefore, keeping in view of above and approval withdrawn by Commissioner (LD) as mentioned in Para 19 above, the representation of petitioner firm may not be disposed off in absence of legible copy of sanction building plan, and this fact has already been intimated to the petitioner in the meeting held on 11.02.2021. After receipt of said plan, DDA will re- examine the misuse data of mezzanine floor being used as office purpose and misuse charges of basement being used for Industrial activity besides other charges applicable as per the extant policy of DDA. (VINAY KUMAR) Director/LSB(I)” {Bold portions emphasized}

31. Although, it appears that reply-cum-representation dated 18.03.2021 alongwith a fresh legible copy of the sanction building plan was filed by the petitioner firm, there was no response from the respondent DDA. In the said backdrop, the matter came up for hearing before this Court on 21.09.2021, and the following order was passed: “The hearing has been conducted through video-conferencing. CM APPL. 32602/2021 (by petr. for directions)

1. The petitioner’s application for conversion to freehold of property bearing no. D-86/1 and D-87, Okhla Industrial Area, Phase 1, New Delhi-110020 has been pending for the past 11 years. Directions were issued to DDA to grant the petitioner and to personal hearing and to duly consider the application. On 27.01.2021, the following order was passed: “CM APPL. 2779/2021 (by applicant/petitioner for directions)

1. Despite a lapse of nearly 14 months since the order dated 20.11.2019 passed by this Court directing the Delhi Development Authority ('DDA') to hear the petitioner and pass appropriate orders, no worthwhile compliance has been made by it. The case having been first listed for compliance on 20.12.2019, was again listed for compliance on 26.02.2020; on the latter date, it was again adjourned to 25.03.2020 at the DDA's request. Nothing worthwhile has come forth from the DDA thereafter. The case could not be taken because of en bloc adjournments, hence this application.

2. In case the order dated 20.11.2019 is not complied with within a period of one week from today, an affidavit shall be filed by the Director, DDA, explaining therein the reasons for delay in compliance.

3. The issue of imposition of costs, etc would be considered on the next date....”

2. DDA heard the petitioner and say now that some documents are missing from their records. But that can hardly be an issue now as the application was supposed to have looked into the issue, a long time ago.

3. The learned Senior Advocate for the applicant/petitioner submits that the DDA had demanded Rs.20,34,832/- as conversion and misuse charges. The partners to the petitioner firm are about 76 & 78 years of age; they are keeping infirm health; in the current pandemic constrained times they are apprehensive about what the future holds for them; they would like closure of the case at the earliest; they are ready and willing to deposit the aforesaid amount, without prejudice to their rights and contentions, so that the DDA can carry out the conversion to freehold. They are also willing to give an undertaking indemnifying the DDA against any third-party claims apropos such conversion.

4. Issue notice. The learned counsel named above accepts notice on behalf of the non-applicant.

5. Let the Commissioner (LD) of the DDA look into the matter and a reply affidavit be filed in 2 weeks, with his/her approval.

6. Without prejudice to the rights and contentions of the parties, let the aforesaid monies be deposited in the court, which shall be kept in an interest-bearing FDR, subject to further orders.

7. List on 29.11.2021. 8. The order be uploaded on the website forthwith.”

32. It appears that the matter remained in limbo on the part of the respondent/DDA and the petitioner firm was again constrained to move another CM APPL. 32602/2021, and upon hearing, the petitioner firm was allowed to deposit a sum of Rs. 20,34,000/-, without prejudice with the Registrar General of this Court, which was evidently done as well.

33. In the aforesaid backdrop of the matter, it is really shocking to find that even after such deposit, the respondent/DDA instead of complying with the directions of this Court, filed additional affidavit on 27.11.2021 through Mr. Aftab Alam, Deputy Director (Indl.) whereby inter alia it brought to the fore that a fresh demand notice for a sum of Rs. 60,65,000/- has been levied upon the petitioner firm for misuse also inter alia bringing out that respondent/DDA has misapplied 2014 policy on the file pertaining to the petitioner firm whereas the policy of 2010 ought to have been applied.

34. To cut the long story short, as this Court found that the additional affidavit dated 27.11.2021 and another affidavit dated 25.01.2022 filed on behalf of the respondent DDA were in deliberate defiance to the directions of this Court dated 20.11.2019, this Court after alluding to the directions vide paragraph (20) of the order dated 20.11.2019 as well as Paragraph (25) of the Speaking Order dated 12.02.2021, passed the following directions on 08.01.2024:

35. Audacious as it may seem, in complete defiance of the aforesaid order/directions, the respondent/DDA then filed a fresh complianceaffidavit through Mr. Vivek Chaudhary, Deputy Director (LSB-I) dated 15.02.2024 and reiterating its stance as disclosed in the earlier affidavits dated 27.11.2021 & 25.01.2022 referred hereinabove.

36. The foregoing discussion clearly highlights that the directions of this Court dated 20.11.2019, which conclusively determined the issues involved in the instant matter, have not been complied with in letter and spirit. What is also pertinent to mention is that speaking order dated 12.02.2021, reproduced hereinabove, constituted a complete volte-face from the decision taken by the respondent/DDA as reflected by the minutes of meeting dated 08.01.2020, which goes as under: “During the meeting the issue of the misuse charges was placed before Director (Indl.) for perusal in respect of plot No. D-86/1 &87, Okhla Indl. Area, Phase-I, New Delhi. In this property case, on the basis of the site inspection reports, misuse data was firmed up and further referred to finance wing after obtaining the approval dated 28.05.2014 of then Director (Indl.) for working out the misuse charges. The finance wing returned the file on 24.06.2014 after working out the misuse charges to the tune of Rs. 11,17,230/after the approval of Finance Minister. During the meeting, the partners of M/s Nath International Corporation has stated that they are not liable to pay any misuse charges since their case is covered in the Cat.(i)(I) of misuse circular dated 26.03.2010. On perusal of the file, it was noted that on the basis of site inspection reports dated 12.02.1996 and 18.10.2005 whereby misuse was existing in basement and Mez. Floor. No show cause notices were served to the unit. The unit submitted the conversion application on 29.06.2010 and on receipt of conversion application inspection was carried out on 01.11.2010 whereby Mez. Floor was found under misuse. In the second instance, no show cause notice was served to the unit. Further, as per site inspection report dated 26.08.2013 no misuse was existing. After the last site inspection, show cause notice dated 04.10.2013 was served to the unit to show cause within 15 days from the date of issue of that notice. As per circular dated 26.03.2010 category i(I) clearly states that cases where complaint/report about misuse is available on file but Show Cause Notices were issued – Fresh inspection to be done. In case the misuse is noticed then misuse charges to be levied for a period from initial date of detection to the date of filing of conversion application. Before levying such misuse, SCN to be issued at this stage. However if the misuse is not found during the fresh inspection, then misuse charges should not be levied. The Commissioner (L.D.) vide his minutes dated 28.04.2016 at NP-106, approved that the unit is not liable to pay the misuse charges as the said issue is covered in Cat.(i)(I) of circular dated 26.03.2010. It was seen that the file was sent to Finance wing for providing NOC on 06.07.2018, however, Finance wing returned the file after calculation of other charges including the earlier calculated misuse charges to the tune of Rs. 1117230/-. After detailed discussion on the issue of misuse, it was decided that, as the case is covered under Cat.(i)(I) of circular dated 26.3.2010, no misuse charges are to be levied. Further, it was decided that matter may be again referred to the Finance Wing for reviewing the issue of misuse.”

37. The only contention which is advanced by the learned Standing Counsel for the respondent/DDA is that the petitioner firm had sub-let the basement and mezzanine floor to Universal Turbo, which violated the terms and conditions of the lease agreement, and therefore, subletting charges were calculated for the basement floor from 12.02.1996 to 18.10.2005 for an area of 152.[2] sq.mts and covered by the impugned demand letter dated 26.09.2018, thereby imposing the other outstanding dues included in the demand of Rs. 20,34,832/raised in total without prejudice. It was urged that the misuse charges had been erroneously calculated in terms of policy dated 22.02.2014, which was valid for only period of 6 months, and therefore, as per misuse policy dated 26.03.2010, a sum of Rs. 17,38,166/- towards misuse of basement and Rs.25,00,000/- towards misuse of mezzanine floor were calculated, and thus, it is stated that in terms of demand letter dated 23.11.2021, issued during the course of proceedings, a sum of Rs. 40,30,490/- is still payable by the petitioner firm. In view of earlier decision on the matter vide minutes dated 08.01.2020, the respondent DDA cannot be allowed to approbate and reprobate in the same breadth.

38. In summary, the impugned demand for misuse charges levied by the respondent/DDA, pertaining to the period from 12.02.1996 to 18.10.2005, is unsustainable in law. There was no bar to prevent the respondent/DDA from issuing a SCN subsequent to the inspection dated 12.02.1996. However, the respondent/DDA raised a stale claim for misuse charges after a lapse of more than seventeen years, vide the impugned SCN dated 04.10.2013.

39. Furthermore, despite the petitioner's application for conversion of the subject property from leasehold to freehold dated 29.06.2010, no action was taken within a reasonable period by the respondent. Notably, successive inspections did not reveal any misuse, rendering the imposition of misuse charges unfounded. Additionally, the petitioner firm's representation/reply dated 16.12.2013 was disregarded, and without affording an opportunity of hearing, the impugned demand was raised after an inordinate delay of almost five years from the SCN, vide letter dated 26.09.2018. The petitioner cannot be made to suffer for this delay.

40. At the risk of repetition, this Court, in paragraph (20) of the order dated 20.11.2019 (reproduced hereinabove), had unequivocally held that the demand for misuse charges was unsustainable. There is no justification for this Court to deviate from its earlier directions, which were not challenged by the respondent/DDA. It is evident that, considering the revenue implications, the respondent/DDA was afforded an opportunity to rectify its stance by this Court. However, instead of making a decision in accordance with the law in a fair and impartial manner, the officials of the respondent/DDA have persisted in attempting to justify their ill-conceived, illegal, and irrational decision by any means, which cannot be countenanced in law. Consequently, the decision dated 12.02.2021 by the respondent/DDA, as well as the subsequent demand notice dated 23.11.2021 levied upon the petitioner firm, cannot be sustained in law.

41. In view of the foregoing discussion, this Court has no hesitation in allowing the present writ petition, consistent with the letter and spirit of the directions passed on 20.11.2019. Moreover, the impugned demand letters dated 26.09.2018 and 23.11.2021, the latter issued during the pendency of these proceedings pursuant to the purported speaking order dated 12.02.2021, are deemed unfair, arbitrary, and unsustainable in law. RELIEFS:

42. The decision dated 12.02.2021 is patently marred by arbitrariness and contradicts the respondent/DDA's earlier decisions on the matter, as reflected in the minutes dated 28.04.2016 and 08.01.2020. Consequently, the aforesaid demand letters issued by the respondent/DDA are hereby quashed and set aside.

43. Further, the respondent/DDA is hereby directed to initiate the process of conversion of the subject property from leasehold to freehold, as per the petitioner firm's application dated 29.06.2010.

44. In view of the peculiar facts and circumstances of the case, it is further directed that the respondent/DDA shall bear the entire cost of purchasing stamp papers and registration charges. The respondent/DDA shall complete the entire process within a period of eight weeks from the date of this judgement.

45. The court directs that the amount of Rs. 20,34,000/- deposited by the petitioner firm, as per the court's directions dated 21.09.2021, be released to the petitioner firm immediately, along with the accrued interest.

46. The pending applications are disposed of accordingly.

DHARMESH SHARMA, J. JANUARY 20, 2025