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HIGH COURT OF DELHI
JUDGMENT
INDIAN COMPRESSORS LIMITED ..... Petitioner
Advocates who appeared in this case:
For the Petitioner :Mr Sukumar Pattjoshi, Sr. Advocate with Mr Pratap Shanker, Mr Swetank
Shantanu, Ms A. Shivani and Ms Surabhi, Advocates.
For the Respondents :Ms Swaty Singh Malik, Ms Yaashna
Jhaaran and Mr Mushan Gupta, Advocates for R-1.
Mr Vikrant Narayan Vasudeva, Advocates for R-2 & R-3.
1. The petitioner has filed the present petition,inter alia, praying that directionsbe issued against the respondents to refund of the sub-letting charges paid the petitioner, along with interest and further seeking conversion of the property (Shed No. 35, Okhla Industrial Estate, New Delhi – hereafter „the Property‟) from leasehold to freehold.
2. The petitioner is a public limited corporation and claims to be the owner of the Property. The petitioner seeks refund of a sum of ₹7,02,450/- 2019:DHC:1265 demanded on account of subletting charges. The levy of subletting charges was disputed by the petitioner; nonetheless, the said amount was deposited pending adjudication of the dispute in this regard. That having been decided in its favour, the petitioner claims refund of the amount of ₹7,02,450/- so deposited. The petitioner is also aggrieved by failure on the part of the respondents to convert the Property from leasehold to freehold. Factual Background
3. In the year 1962, the Directorate of Industries allotted the Property on lease to Public Utility Supplies Company which was a sole proprietorship concern of one Mr D.N. Bhasin. On 09.01.1985, Public Utility Supplies Company deposited a sum of ₹Rs.2,08,929.45/- with respondent no.1 for executing a Hire Purchase agreement.
4. On 25.02.1987, Public Utility Supply Company (D.N. Bhasin) transferred the property in favour of the petitioner (then known M/s Didwania Brothers Pvt. Ltd.) by executing a General Power of Attorney, Indemnity Bond, Will along with the possession letter. On 28.04.1987, this was duly informed to the respondents. The petitioner also sought substitution in place of Utility Supply Company (D.N. Bhasin), as the complete Hire Purchase Agreement price had been paid.
5. On 22.07.1987, respondent no.1 issued a show cause notice against Public Utility Supply Company proposing an action to cancel the allotment of the Property and calling upon the noticees to show cause as to why the same should not be done. The petitioner responded to the aforesaid show cause notice and requested that the Property be regularized in its favour.
6. Thereafter, on 30.05.1988, the petitioner‟s name was changed from Didwania Brothers Pvt. Ltd. to Didwania Brothers Ltd., as the petitioner‟s turnover had exceeded ₹1 crore; consequently, the petitioner had become a Public Company by virtue of Section 43A of the Companies Act, 1956. Thereafter, the petitioner‟s name was changed to its current name – M/s Indian Compressors Limited.
7. On 20.09.1988, the petitioner once again requested the Commissioner of Industries for regularizing the Property in its name. On 20.02.2004, the petitioner was directed to hand over vacant possession of the Property within a period of 30 days. This was followed by another letter dated 10.03.2004 directing the petitioner to hand over vacant possession of the Property.
8. Aggrieved by the same, the petitioner preferred a writ petition being W.P. (C ) 5546/2004 (captioned Indian Compressors Limited v. Government of National Capital Territory of Delhi and Ors.), inter alia, impugning the order dated 20.02.2004, whereby the allotment of the Property was cancelled. The petitioner also prayed that the transfer of the property in his favour be allowed on payment of necessary charges in terms of the relevant guidelines as applicable.
9. In the meantime, respondent had also raised the issue of subletting of the property to M/s Cryo Pumps Asia Pvt. Ltd., which was a company held entirely by the shareholders of the petitioner.
10. On 16.04.2004, this Court passed an order (CM No. 4176/2004 in W.P. (C ) No. 5546/2004) directing that the petitioner would not be dispossessed and no coercive steps be taken against the petitioner subject to the petitioner depositing (subject to further orders without prejudice to the rights and contentions of the parties) a sum of ₹7,02,450/- as demanded by the respondents.
11. The aforementioned writ petition (W.P. (C ) 5546/2004) was finally disposed of by an order dated 09.05.2006.In its order, this Court noted that three questions had arisen in the said case: (i) What are the charges payable for regularization of the property; (ii) whether there was any subletting; and
(iii) whether there was any encroachment. The Court also noted that with effect from February, 2006, a scheme for conversion of property from leasehold to freehold had been publicised.
12. The issue as to what were the charges payable for regularization was decided by the Court. The Court held that in terms of Clause 3 (vii) of the Guidelines for Management of an Industrial land managed by the Delhi Administration, a sum of ₹4/- per square feet was payable and accordingly directed that on payment of the said sum, the Property would be deemed to be regularized in favour of the petitioner. The question as to subletting was referred to arbitration by an Arbitrator appointed by the Court. The said order is set out below:- “Three questions arise in the present case. Firstly, what are the charges which are payable for regularisation. The Respondents have demanded fifty per cent unearned increase on the cost of the plot. On a reading of Clause 3(xii) of the Guidelines for Management of Industrial Land Managed by the Delhi Administration only a sum of Rs.4/per square feet is claimable. It is accordingly directed that upon payment of Rs.4/- per square feet to the Respondent, the property in question shall be deemed to have been regularised in favour of the Petitioner. This leaves the question of whether there was any sub-letting and whether any encroachment has taken place. On these two issues learned counsel for the Respondent states that the matter be referred to Arbitration, as there is an Arbitration Clause subsisting between the parties. Mr. Mehta, learned Senior Counsel for the Petitioner, however, submits that with effect from February, 2006 a Proposal to convert the property from Leasehold to Freehold has been published. Mr. Mehta also contends that only a generator has been placed at the rear of the plot in question and there is no other “encroachment”. The Respondents are directed to carry out a fresh Inspection of the premises and whatever the Findings of the Respondents are they shall be abided with by the Petitioner. The Inspection shall take place on 27.05.2006 at 11.00 A.M. The only remaining issue in contention is whether there has been any sub-letting. Although a Panel of Arbitrators exists with the Respondents, keeping in view the purely legal nature of the questions viz. whether subletting has taken place even though the alleged sub-lettee is stated to be a subsidiary of Petitioner, I appoint justice (Retired) O.P. Dwivedi as the Arbitrator. His Fee shall be paid by the Petitioner. Keeping the circumstances of the case in view, it is further directed that if the Petitioner is desirous of availing of the extant Scheme for conversion of the property from Leasehold to Freehold, the pendency of proceedings either in Arbitration or in regard to the Inspection to determine encroachment, shall not be alluded to by the Respondents for refusing to permit the Petitioner to avail of the said Conversion Scheme. Petition stands disposed of. Parties to bear their respective costs. Interim Orders shall continue until the passing of the Award.”
13. On 30.05.2006, the petitioner made an application for regularization of the Property in its favour. In terms of the order dated 09.05.2006,the petitioner also paid the requisite fee of ₹26,752/-.
14. On 20.05.2009, the Arbitral Tribunal delivered an award holding that respondent was not entitled to any subletting charges.
15. On 23.10.2009, the petitioner filed an application for conversion of the property from leasehold to freehold and paid an amount of ₹9,72,726/as the conversion charges, as then applicable.
16. The petitioner did not receive any intimation from the respondents and, therefore, sent repeated requests for conversion of the Property from leasehold to freehold. The petitioner also took recourse to the provisions of Rights to Information Act, 2005 (hereafter „RTI Act‟) seeking information as to the status of its application. On 28.10.2013, the petitioner was informed in response to its application under the RTI Act that the petitioner‟s application for conversion had not been processed on account of non-removal of encroachment on Government land.
17. Thereafter, the petitioner sent letters disputing the allegation that there was any encroachment on its part and further sought information with regard to the status of its application.
18. On 28.05.2014, the petitioner filed an appeal before the Appellate Authority seeking information with regard to its application and its various letters (01.09.2010, 21.06.2011, 22.07.2011, 14.10.2011 and 08.12.2011).
19. On 03.06.2014, the petitioner filed another application under the RTI Act, in response to which the petitioner was informed that the requisite information had already been provided to the petitioner. Aggrieved by this response, the petitioner preferred an appeal under Section 19 of the RTI Act, which was disposed of on 28.08.2014 and the petitioner was called upon to approach the respondents by filing a fresh application before the PIO or to prefer a Second Appeal under Section 19(3) of the RTI Act.
20. On 30.08.2014, the petitioner filed a fresh application before the PIO, however, the same did not elicit any response. On 28.10.2014, the petitioner filed yet another application under the RTI Act. In response to the said application, the petitioner was informed by a letter dated 12.12.2014 that the petitioner‟s application for conversion was not processed due to nonremoval of encroachment on Government land.
21. Aggrieved by the action of the respondents in not converting the Property to freehold, the petitioner has filed the present petition.
22. The present petition was moved on 12.05.2017. On that date, notice was issued to the respondents which was accepted by the learned counsel appearing on their behalf, whoalso sought time to take instructions. The learned counsel sought repeated opportunities to seek instructions, but no satisfactory response was received from them. On 10.07.2017, a final opportunity was granted to the respondents to file the reply within a period of four weeks. However, despite the same, the respondents did not file any counter affidavit and the averments made in the petition remained uncontroverted. The averments made in the petition did indicate whether an inspection had taken place, as directed by the Court. Subsequently, this Court was informed that an inspection was not conducted at the material time but an inspection had been carried out recently, and the same indicated that there were certain encroachments made by the petitioner. It was also contended on behalf of the respondents that the petitioner‟s application for conversion of the Property from leasehold to freehold had not been processed on account of encroachment on public land.
23. A perusal of the arbitral award rendered on 20.05.2009 indicates that the arbitral tribunal had returned an unambiguous finding that the petitioner did not sublet the Property to someone else or assigned to some other company. It was further held that respondents were not entitled to take any action against the petitioner and the charges levied were unjustified.
24. The said arbitral award has not been challenged by the respondents and has become final. Notwithstanding the same, the respondents have failed and neglected to refund the sub-letting charges as deposited by the petitioner pursuant to orders of this Court.
25. The action of respondents in not processing the petitioner‟s request for conversion of the property from leasehold to freehold on account of any alleged encroachment is also unjustified. This Court, by the order dated 09.05.2006 passed in W.P.(C) 5546/2004 and 2618/2000, had clearly directed the respondents not to refuse the petitioner‟s request for conversion on that ground.
26. On 20.02.2019, the Managing Director of DSIIDC was present in Court and had assured this Court that the petitioner‟s application for conversion would be processed notwithstanding any allegation of encroachment.
27. In view of the above, the respondents are directed to refund the subletting charges of ₹7,02,450/-as deposited by the petitioner pursuant to the orders of this Court. The respondents shall also forthwith process the petitioner‟s application for conversion of the property from leasehold to freehold.
28. It is clarified that if there is any encroachment on public land by the petitioner, the respondents are at liberty to institute appropriate proceedings for removal of the same and the petitioner is also bound to ensure that the encroachment found by the respondents is removed.
29. The petition is disposed of in the aforesaid terms. The pending application is disposed of.
VIBHU BAKHRU, J FEBRUARY 25, 2019 pkv