Delhi High Court
La Medica Manufacturing Pvt. Ltd. & Ors. vs Delhi Development Authority Ors. on 5 May, 1998
Equivalent citations: 1998IIIAD(DELHI)621, 73(1998)DLT362, 1998(45)DRJ417
Author: R.C. Lahoti
Bench: R.C. Lahoti, S.N. Kapoor
ORDER R.C. Lahoti, J.
1. In the Okhla Industrial Area there is an industrial plot bearing No.F-83 owned by Delhi Development Authority, the respondent No.1. The said plot was allotted to M/s.Drug Deal Corporation, a partnership concern, constitution whereof was later on changed to M/s.La Medica Manufacturing Pvt.Ltd., the petitioner herein. The change in the constitution of firm was brought to the notice of the DDA and acceded to by the later vide its communication dated 12.8.77 to the petitioner. Possession over the plot was delivered to the allottee on 1.11.74. A deed of perpetual lease 'was executed on 28th February, 1977 and was registered too. Nevertheless, the deed of lease was effective from 1.11.74. On 8.1.75, the DDA had issued a NOC for consideration of building plan on the said plot in anticipation of execution of lease deed.
2. The lease is under the Government Grants Act, 1895. Clause 5(a) of the deed of lease provides as under :-
(5)(a) The lessee shall not sell, transfer, assign or otherwise part with the possession of the whole or any part of the industrial plot except with the previous consent in writing of the lessor which he shall be entitled to refuse in his absolute discretion.
PROVIDED-that such consent shall not be given for a period of ten years from the commencement of this Lease unless, in the opinion of the Lessor, exceptional circumstances exist for the grant of such consent.
PROVIDED FURTHER that, in the event of the consent being given the Lessor may impose such terms and conditions as he thinks fit and the Lessor shall be entitled to claim and recover a portion of the unearned increase in the value (i.e. the difference between the premium paid and the market value) of the industrial plot at the time of sale, transfer, assignment, or parting with the possession, the amount to be recovered being fifty per cent of the unearned increase and the decision of the Lessor in respect of the market value shall be final and binding.
PROVIDED FURTHER that the Lessor shall have the preemptive right to purchase the property after deducting fifty per cent of the unearned increase as aforesaid.
3. On 4.4.75, the petitioner made an application for sanction building plans. Sanction was allowed by the DDA on 20.5.75.
3.1 The petitioner's construction work progressed. On 17.4.78, the petitioner gave a notice for inspection and approval of the underground drainage, sanitary and other pipelines before covering the same as contemplated by para 7.2.2 of the Delhi Building Bye-Laws. On 17.5.88, the petitioner gave another notice of the Sanitary/water supply working having been executed as per building bye-laws/sanction plan as contemplated by para 7.2.3 of the Building Bye-laws.
3.2 On 19.5.78, the petitioner applied for issuance of Building Completion Certificate. The application remained pending. It is only on 22.6.88 (i.e. after a lapse of 10 years) that the Building Section of the respondent-DDA issued building completion certificate/occupancies certificate (Annexure-X) by reference to the petitioner's notice of completion dated 19.5.78.
4. On 12.8.84, the petitioner made an application to the respondent-DDA seeking its permission to sub-let 10,000 sq.ft covered area out of the total constructed area of 40,000 sq.ft. to M/s.Mayar Traders Pvt.Ltd. engaged in the activity of paper conversion and printing press. A sum of Rs.76,000/- as rental fee was deposited with the State Bank of India to the credit of DDA. On 20.10.84, the petitioner gave a reminder. On 17.12.84, the DDA vide its communication Annexure-W allowed the petitioner's request for subletting to M/s.Mayar Traders Pvt.Ltd. However, the permission was for a period of one year only i.e. from 1.11.84 to 31.10.85.
5. On 31.8.84, the petitioner entered into an agreement to sell the said plot, alongwith its building thereon, in favour of M/s.Mayar Traders Pvt.Ltd. i.e. respondent No.3. Agreement to sell is Annexure-F.
6. On 20.12.84, the petitioner made an application (Annexure-G) to the DDA seeking its permission to sell the plot with building to the respondent No.3.The application remained pending with the respondent-DDA. Some documents were called for from the petitioner from time to time and the petitioner went on providing the called for documents to the DDA. On 23.6.91, the DDA granted permission to sell asked for by the petitioner subject to payment of unearned increase by the petitioner in terms of Clause (5)(a) of the lease deed. On 3.2.94, the DDA raised a demand, working out the quantum of unearned increase by applying the rates of plot as applicable to the year 1991-92, the year in which the permission to sell was granted by the DDA. The petitioner made several representations to the DDA requesting that the rates which were relevant and which ought to have been taken into consideration for working out the quantum of the unearned increase should have been those applicable in the year 1984-85 the year in which the petitioner had sought for permission to sell the plot. It was submitted that the petitioner cannot be blamed and held liable for the consequences flowing from the respondent's delay in dealing with the application.
7. The respondent-DDA has in its counter filed on the affidavit of Sh.S.Roy, Commissioner (Land Disposal) DDA placed reliance on resolution No.13 dated 2.2.81 according to which no permission for sale may be granted unless a period of ten years has elapsed and if a building has been constructed on the plot then unless a period of three years has elapsed from the date of construction having been completed, which date would be the date of completion certificate/occupancy certificate having been issued by the building department of the DDA. It is submitted that the completion certificate was issued to the petitioner on 20.6.88 and therefore, the permission to sell could not have been granted before 20.6.91. The completion certificate was submitted only on 6.7.91 on which date strictly speaking the application filed by the petitioner seeking permission to sell became a valid and complete application prior to which date it was an incomplete application liable to be ignored in the eye of law.
8. In the replication filed by the petitioner it is submitted that notice of completion of the building was served on the respondent-DDA on 19.5.78. The respondent-DDA was bound to take a decision thereon latest by 19.7.78. In the absence of any communication to the contrary the occupancy certificate would be deemed to have been granted on 19.7.78. Any delay thereafter in issuance of completion certificate cannot be attributed to the petitioner.
9. On behalf of respondent-DDA reliance is placed on its policy decision, the relevant part whereof reads as under :-
INDUSTRIAL PLOTS:
(i) In the case of industrial plots also, no permission for unbuilt plots may be allowed under any circumstances.
(ii) If an industrial plot obtained by the lessee at the reserve price, has been constructed upon, no permission for sale may be granted unless the period of 10 years has elapsed and that too if the building had been constructed thereupon atleast three years prior to the date of making applications for permission to sell.
(iii) If any one makes an application for permission to sell an industrial plots alongwith the structure constructed thereupon before the expiry of ten years from the date of execution of the lease deed, he will have to prove the existence of any of the "exceptional circumstances", mentioned in the foregoing sub-para."
10. We are very clear in our mind that so far as the calculation of a period of 10 years from the date of allotment of plot is concerned, the relevant and effective date would be 1.11.74, the date with which the allotment became effective and with which date the lease dated 28.2.77 has been made to commence and not 28.2.77, the date on which the lease deed came to be executed. The formal execution of lease deed may be delayed but once executed it will relate back to the date of commencement of lease as set out in the deed so far as the calculation of the life of the lease and consequently the period contemplated by resolution No.13 dated 2.2.81 are concerned. The petitioner was therefore eligible to move an application for permission to sell the plot on 1.11.84, the date on which the period of 10 years from the 1.11.74, date of commencement of lease, expired.
11. The next question which arises for consideration is the date on which the building on the plot would be deemed to have been completed. It cannot be disputed that the building on the plot had actually stood completed on 19.5.78, the date on which the petitioner had applied for issuance of completion certificate. The learned counsel for the petitioner has invited the attention of the Court to certain provisions of Delhi Building Bye-Laws 1983 as applicable to DDA. The authority having jurisdiction under bye-laws is the Delhi Development Authority (bye-law 2.5). before occupying any building or part of a building the person intending to do so must have been granted the occupancy certificate. Every owner is required to give a notice of completion of the building to the authority regarding completion of the work described in the building permit. The authority on receipt of the notice of the completion shall inspect the work and communicate the sanction or refusal or objection thereto in the prescribed proforma within 60 days from the date of receipt of notice of completion. If nothing is communicated within the said 60 days, the work shall be deemed to have been approved by the authority for occupation (bye-laws 7.5.1, 7.5.2 and 7.6).
12. In the case at hand, it is not pointed out if and how the notice of completion given by the petitioner was inherently defective or suffering from such a defect so as not to amount to a notice of completion in the eyes of law. Admittedly, refusal was not communicated to the petitioner within a period of 60 days. The occupancy certificate would, therefore, be deemed to have been issued on 19.7.78. The occupancy certificate issued on 22.6.88 would therefore relate back to 19-6-78. Thus even according to the policy of the DDA, on 22.12.84 - the date on which the petitioner had applied for permission to sell, a period of three years from the date of construction of building on the plot had elapsed.
13. To sum up, on 22.12.84, the date on which the petitioner moved an application seeking permission to sell the plot alongwith the building, both the conditions had stood satisfied : a period of 10 years had elapsed from the commencement of the lease and a period of three years had elapsed from the date of completion of the building.
14. The next question which arises is - by reference to which date the amount of unearned increase is to be calculated?
15. The application for permission to sell was made on 20.12.84 (vide Annexure-G, page 52 of the paper book). The date of making the application is not stated in the application but the same is not in dispute.
16. For the purpose of calculating the unearned increase Clause (5)(a) of the deed of lease reproduced in para 2 above provides for the same being calculated by working out the difference between the premium paid (by the lessee at the time of creation of the lease) and the market value of the plot at the time of sale. The fact remains that a sale cannot be made without the permission of the DDA. The lessee has to make an application for securing such permission. What happens if the lessee makes an application seeking the permission but the DDA sits over the application and does not take decision thereon for quite a long time. It is a judicially noticeable fact that the prices of real estate, especially in Delhi, have been rising day-by-day and within the last decade or two they have just sky-rocketed. While seeking permission to sell the prices may be less but they would have certainly risen high, if not very high, by the time permission to sell is actually granted.
17. Two fundamental legal principles may be taken note of. LEX NON COGIT AD IMPOSSIBILIA. - The law does not compel a man to do that which he cannot possibly perform. NULLUS COMMODUM CAPERE POTEST DE INJURIA SUA PROPRIA. - No man take advantage of his own wrong. (see Broom's Legal Maxims, 10th eddition at page 162 and page 191). The lessee having made an application complete in all requisite particulars, it is for the lessor-DDA to grant the permission on the very same day if it can. But the lessee-applicant cannot compel the DDA to act promptly. The lessee does not have any control over the time which may be consumed by the lessor-DDA in considering the lessee's application. The DDA, if on account of its bureaucratic style of functioning and absence of personal interest in expeditiously deciding the application indulges into file pushing ethos or otherwise sleeps over the application or indulges into unreasonably delaying dealing with the application, the lessee-applicant cannot be made to suffer. The DDA cannot be allowed to earn a premium by its own delay in dealing with the application. The lessee-applicant cannot be made to suffer even if there is on one to blame.
18. Dayawanti Vs. NDMC Dev Raj Gupta Vs. Union of India and Meirah Bhargava Vs. Lt.Governor & Ors. 1991 RLR Note 68 are the authorities for the proposition that the DDA can claim unearned increase as on the date of application for permission to sell; it cannot take any advantage of its own wrong by delaying dealing with the application. The Division Bench in Dev Raj Gupta's case (supra) was subject matter of appeal preferred by the Union of India before the Supreme Court. Vide judgment dated 23.10.90 reported as UOI Vs. Dev Raj Gupta & Ors 42 (1990) DLT 566 their Lordships have held that the additional premium shall be calculated by the appellants on the basis of the rate which was prevalent on the date of the application made for the change of user.
19. What is an application complete in all particulars? If an application is made, which is substantially in the form prescribed if any, and gives all such particulars as may be relevant and necessary for the decision by the DDA on the issue of granting permission to sell, the application is a valid application. If the DDA raises any additional queries for its own satisfaction or calls for some additional documents, it is free to do so but it will not result into altering the date of the application. However, if the application suffers from any such substantial defect or is associated with failure to annex any such material document as would render the application itself an invalid one or on account of which defect or deficiency the application would cease to be an application in the eye of law then the application would be deemed to have been filed only on such date on which the defects are removed or deficiencies are made up or the essen-
tial documents are supplied, as the case may be.
20. In the case at hand, it is clear that the application made on 22.12.84 was complete in all material particulars. It did not suffer from any such deficiency as would invalidate the filing of the application. The respondents went on calling for incidental or secondary information and documents and also went on insisting on production of building certificate for which the petitioner could not be blamed. The DDA was, therefore, obliged to calculate the unearned increase by working out the difference between the premium paid and the value of the plot on the date of application dated 22.12.84.
21. An incidental issue also arises. The petitioner had sought for permission to sub-let on 12.8.84. Permission was allowed w.e.f. 1.11.84. Permission to sell was granted on 20.6.91. It is not disputed at the Bar that the petitioner would remain liable to pay sub-lease charges for the period 1.1.84 to 30.6.91. According to the petitioner such charges have already been paid, if there is any deficiency in such payment the petitioner is prepared to make good the same.
22. For the foregoing reasons, the petition is allowed. The impugned demand working out the amount of unearned increase is hereby quashed and set aside. The respondent-DDA is directed to calculate the unearned increase by reference to the rates applicable for the year 1984-85 in view of the valid application seeking permission to sell the plot aving been made by the petitioner on 20.12.84. The sub-letting charges must be cleared before the petitioner may sell the property, the permission to sell dated 23.6.91 already granted by the respondent-DDA shall be valid and effective subject to payment of the unearned increase worked out as per the above said direction.
23. The respondent-DDA shall within four weeks from today calculate and deliver a fresh demand of unearned increase to the petitioner. On depositing the amount of unearned increase and compliance with usual formalities, if any, the DDA shall within eight weeks thereafter execute the requisite conveyance deed of the property and then mutate the property in the name of the transferee. No order as to costs.