Delhi District Court
M/S Cottage Arts Emporium vs Indian Tourism Development ... on 11 December, 2018
IN THE COURT OF MS. POONAM A. BAMBA
DISTRICT & SESSIONS JUDGE, NEW DELHI.
In the matter of :
PPA No. 189/16
M/s Cottage Arts Emporium
Shop No.05, Hotel Ashok
New Delhi110021. ...... Appellant
Versus
1. Indian Tourism Development Corporation
SCOPE Complex, Core8
Lodhi Road, New Delhi.
2. Estate Officer
Indian Tourism Development Corporation
3, Sansad Marg
Jeevan Vihar Building
1st Floor, Rear Side
New Delhi. ..... Respondents
APPEAL UNDER SECTION 9 OF THE PUBLIC PREMISES (EVICTION OF UNAUTHORIZED OCCUPANTS) ACT, 1971, ON BEHALF OF THE APPELLANT AGAINST THE ORDER DATED 05.12.2013 Date of filing of appeal : 21.12.2013 Arguments concluded on : 11.12.2018 Date of judgment : 11.12.2018 PPA No. 189/2016 M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 1 of 19 J U D G M E N T 1.0 Vide this judgment, I shall dispose of the appeal under section 9 of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 ("the PP Act" in short) against the order of damages dated 05.12.2013 ("the impugned order" in short) under subsections (1) & (2A) of Section 7 PP Act, passed by the Estate Officer, directing the appellant to pay damages to the tune of Rs.2,22,93,565/ (Rupees Two Crore Twenty Two Lakhs Ninety Three Thousand and Five Hundred Sixty Five Only) w.e.f. 01.04.1998 till 31.12.2010 and damages @ Rs.500/ per sq.ft. per month from 01.01.2011 till the vacant and peaceful possession of the Shop No. 05, 1st Floor, Ashok Hotel, 50B, Chanakyapuri, New Delhi ("the said shop" in short) is handed over by the appellant. The order further directed the appellant to pay interest on the above said amount @12% per annum from 01.01.2011 till its final payment.
2.0 Briefly stating the facts relevant for disposal of this appeal and which are not in dispute are, that the the appellant was given the said shop on license basis vide License Agreement for the PPA No. 189/2016 M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 2 of 19 period 15.02.1989 to 31.03.1992 at a license fee of Rs.4,92,562.50 for the entire license period. The licence was renewed w.e.f. 01.04.1992 to 31.03.1995. After expiry of the said license period, negotiations were held between the appellant and the respondent no.1. Vide letter dated 07.03.1997, the respondent no.1 agreed to renew the license for a further period of three years w.e.f.01.04.1995 to 31.03.1998 at the license fee of Rs.Two Lacs Eighty Eight Thousand per annum.
2.1 It is the case of the respondent no.1/ITDC that despite repeated requests, the appellant neglected and failed to execute the fresh License Deed for a further period and even failed to pay the license fee at the agreed rate. In view of the same, recovery proceedings u/S 7 PP Act against the appellant were initiated. The appellant filed Writ Petition(C) before the Hon'ble High Court. In the said petition,the Hon'ble High Court stayed the recovery proceedings initiated by respondent no.1. However, the said Writ Petition came to be dismissed vide order 11.11.2009 and the stay order was vacated. The said proceedings were revived. Vide order under Section 7 PP Act, the appellant was found liable to pay a sum of Rs.3,32,136/ towards licence fees for the period 01.04.195 to 31.03.1997. He was also directed to pay interest @24% w.e.f.
PPA No. 189/2016M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 3 of 19 01.04.1997 till its final payment. The appellant had preferred an appeal against the said order vide PP No. 40/13. In the said appeal, subsequently the appellant did not challenge the outstanding licence fee and pressed only for reduction in rate of interest. Ld. Predecessor of this court reduced the rate of interest from 24% to 10% and disposed of the appeal vide judgment dated 19.07.2016.
2.1.1 It is further submitted by the respondent that as after expiry of license by efflux of time on 31.03.1998, the license was not renewed, the appellant was called upon to vacate the said shop. But the appellant continued to occupy the said shop. As neither did the appellant hand over the vacant possession of the said shop nor did it pay the outstanding dues, proceedings for eviction and recovery of damages under Sections 5 & 7 PP Act were initiated against the appellant, culminating into passing of the orders of eviction and recovery of damages.
3.0 It is a matter of record that the order of eviction dated 21.01.2014 was challenged by the appellant herein vide appeal PPA No. 130/2016. Said appeal was dismissed by this court vide judgment dated 02.11.2018. Admittedly, the said judgment has not been challenged by the appellant till date. It is also a matter of PPA No. 189/2016 M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 4 of 19 record that the appellant handed over the keys of the said shop only on 18.05.2018, during the pendency of the said appeal.
3.1 In view of the above, it can not be disputed that the appellant was in unauthorized occupation of the said shop w.e.f. 01.04.1998 till handing over of the vacant and peaceful possession of the said shop.
4.0 Vide this appeal, the appellant has challenged the impugned order (of damages for unauthorised occupancy) on various grounds. However, during these proceedings, the Ld. Counsel pressed only two grounds. First, the ground of limitation. It is pleaded that for the dues pertaining to the period w.e.f. 01.04.1998 to 31.12.2010, an application for recovery before the Estate Officer was filed in February 2011. Thus, the claim for the period prior to February 2008 is barred by limitation. In support, the appellant has placed reliance upon the judgment of Hon'ble Delhi High Court dated 02.05.2016 in W.P. (Civil) 248/2015 in Union of India Vs. Deepa Sharma. Second ground which is pressed is that the Estate Officer awarded damages @Rs.500/ w.e.f. 1998 without assigning any reason for arriving at the said amount. Therefore, the impugned order needs to be set aside. In support, the appellant has PPA No. 189/2016 M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 5 of 19 placed reliance upon the judgment of Hon'ble Bombay High Court dated 04.03.2009 in Writ Petition No. 5591/2008 titled as M/s Golden Chariot Airport Vs. Airport Authority of India. It is also submitted that the Estate Officer even failed to appreciate that the respondent no.1 ITDC settled the dues with M/s Rajasthan Jewel Palace & Shree Siddhartha Exports in occupation of similar shop @ Rs.140 per sq. ft. per month, which shows that the prevailing rent then was Rs.140/ and not Rs.500/, as claimed and awarded by the Estate Officer mechanically.
4.1 The respondent sought dismissal of this appeal pleading that the licence of the said shop stood expired by efflux of time on 31.03.1998; thus the appellant became an unauthorized occupant of the said shop after 31.03.1998 and was was liable to pay damages w.e.f. 01.04.98. Limitation Act has no applicability to recovery of damages under the Public Premises Act. Therefore, the Estate Officer has rightly awarded damages along with interest, considering nonpayment of dues by the appellant despite repeated demands and lapse of considerable time.
5.0 I have heard Sh. Sanjay Gupta, Advocate for the appellant and Sh. Deepak Thukral, Advocate for the respondents PPA No. 189/2016 M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 6 of 19 and have perused the record carefully.
LIMITATION 6.0 Let me at the outset deal with the issue of limitation. The appellant has contended that the respondent no.1 vide its application u/s 7 PP Act filed in February 2011, claimed recovery of dues for the period 01.04.1998 to 31.12.2010 i.e. for a period of 12 years and 9 months. The claim for the period prior to February 2011 is barred by limitation. In support, the Ld. Counsel for the respondent has placed reliance upon the judgment of Deepa Sharma's case (supra). It is further submitted by the appellant that although, this contention of limitation was raised before the Estate Officer, he rejected the same without giving any reasons. On the other hand, Ld. Counsel for the respondent has contended that Limitation Act does not apply to recovery of damages under PP Act and placed reliance upon the judgment of Sharma Montessori School & Oriental College Society Vs. Union of India & Ors 195 (2012) Delhi Law Times 291.
6.1 It may be mentioned that the issue of limitation with respect to recovery of dues under Section 7 PP Act came up for consideration before the Hon'ble Madhya Pradesh High in L.S. PPA No. 189/2016 M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 7 of 19 Nair V. Hindustan Steel Ltd. Bhilai & Ors. AIR 1980 M.P. 106. The Hon'ble Division Bench after considering the matter observed as under :
"10. It was also submitted that the recovery of damages for a period beyond 3 years was time barred. The Limitation Act has no application to proceedings before the Estate Officer who is not a Court. Learned counsel for the petitioner relied upon the case of Kalu Ram V. New Delhi Municipal Committee, (1965) 67 Pun LR 1190 in support of his submission. There is nothing in Section 7(2) which authorises the Estate Officer to assess the damages on account of the use and occupation of the premises and by order require the person to pay the damages, to show that there is any rule of limitation by which the Estate Officer is governed. As the Limitation Act has no application to proceedings before the Estate Officer and as the jurisdiction of Civil Court is entirely barred in matters governed by the Public Premises Act, it is difficult to accept the argument that there is any period of limitation for recovery of damages. The Punjab case on which reliance was placed, construed the words "rent payable" as they occurred in Section 7 (1) of the Public Premises Act, 1958, and construed them to mean "rent legally recoverable by a suit." The case has no application for construing Section 7(2) of the Public Premises Act, 1971, which deals with the power to assess and order payment of damages and where the language used is entirely different. Further, Section 15 of the 1971 Act now bars a suit and the remedy under the Act is the only remedy which can be availed of. In such a situation, the Limitation Act cannot be inferentially applied to proceedings before the Estate Officer."
6.2 Even the Hon'ble Delhi High Court in its judgment dated 30.09.2004 in NDMC Vs. Sh. Charan Singh Gupta and ors. WP (C) No.4688 of 1997 while dealing with the issue of PPA No. 189/2016 M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 8 of 19 limitation period for recovery of damages under PP Act, made reference with approval to the judgment of Hon'ble MP High Court in L.S. Nair's case (supra). The Hon'ble Delhi High Court appreciated the distinction between provisions of subsection (1) of Section 7 PP Act (which dealt with arrears of rent) and subsection (2) of Section 7 of PP Act (which dealt with recovery of damages for unauthorised occupation). The relevant portion of the judgment is reproduced hereunder :
"5. The short controversy, which thus arises for consideration, is whether the petitioner Council is entitled to recover damages against respondent No. 1 from the date the allotment was cancelled or for a period of only three years prior to the proceedings under the said Act.
6.....
12. It may be appropriate to first consider the issue of limitation, which has been held against the petitioner by the appellate authority.......
13........
14. There is no doubt that in Kalu Ram's case (supra), the Supreme Court while examining the provisions of subsection (1) of Section 7 of the said Act came to the conclusion that the period of limitation would be three years. However, the said decision arose on account of the phraseology used where the word 'payable' has been used which was construed to mean what was 'legally recoverable'. The phraseology used in subsection (2) of Section 7 of the said Act is quite different, which is for the determination of damages. It is also to be noticed that the introduction of Section 15 in the said Act bars the remedy of a civil suit and thus, it is only the proceedings for determination of damages under Section 7(2) where the amount has to be quantified.
15. The distinction between the provisions of subsection (1) and subsection (2) of Section 7 of the said Act was noticed by the Division Bench of the Madhya Pradesh High Court in L.R. PPA No. 189/2016 M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 9 of 19 Nair's case (supra) as also the consequences arising from Section 15 of the said Act, which came into force subsequently to the initiation of proceedings under the earlier enactment against Kalu Ram. It was held that the judgment in Kalu Ram's case (supra) would not apply to the quantification of damages under subsection (2) of Section 7 of the said Act. This judgment has been followed by learned Single Judges of this Court in Nandram's case (supra), Inderjeet Singh's case (supra) and Shri Vijay Kumar Rajput's case (supra).
16...... This fact is specifically noticed in Shri Vijay Kumar Rajput's case (supra). I am, thus, unable to accept the conclusion arrived at by the estate officer and the appellate authority that no damages could have been recovered beyond the period of three years by the petitioner on account of applicability of the Limitation Act and the impugned orders are set aside to that extent."
6.3 In Sharma Montessori School's case (Supra) relied upon by the respondent, the Hon'ble Delhi High Court reiterated the above position of law after referring to Nand Ram's case and Charanjit Singh Gupta's case (supra), observing as under :
"10. Having considered the submissions advanced, impugned order, the material on record and decisions cited, I find that there is no limitation provided in the Public Premises Act for initiation of eviction proceedings or for recovery of damages. This Court in Nand Ram & Others Vs. Union of India & Others, 87(2000) DLT 234, has categorically held that Public Premises Act being a special Act would prevail upon the Limitation Act. So, petitioner's reliance upon decision in Inderjeet Singh (supra) is of no avail as the same has been considered by this Court in a latter decision in W.P.(C) No. 4688/1997, titled as New Delhi Municipal Council Vs. Charan Singh Gupta & Others, rendered on 30th September, 2004, wherein it PPA No. 189/2016 M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 10 of 19 has been noted that even if the provisions of Limitation Act, 1963 do not apply to proceedings under Public Premises Act, but still, an authority must act expeditiously in taking out proceedings for the recovery of damages."
6.4 Thus, it is a settled position of law that the Limitation Act has no applicability to recovery of damages under Section 7(2) PP Act. Though recovery of rent/licence fee under Section 7(1) PP Act, is governed by Limitation Act in the light of Kalu Ram's judgment (supra). In view of the same, the judgment of the Hon'ble High Court in Union of India Vs. Deepa Sharma's case (supra) as relied upon by appellant is of no assistance to the appellant. The facts in the said case were very different. In that case, recovery was sought to be made from the legal heirs of the allottee but no notice under Section 7 of PP Act was issued to them. Further, one of the legal heirs was not even impleaded.
6.5 As already noted in para 2.3 above, the appellant was in unauthorized occupation of the said shop w.e.f. 01.04.1998. Thus, it was liable to pay damages for the said period. In view of the same, the recovery of damages prior to the year 2008 was not barred by limitation.
PPA No. 189/2016M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 11 of 19 ORDER FOR RECOVERY OF DAMAGES 7.0 The appellant has also challenged the quantum of damages i.e. at the rate of Rs.500/ per sq. ft. per month, awarded by the Estate Officer. It is pleaded that the Estate Officer without application of mind, awarded the damages simply as prayed for by the respondent. The said amount is exorbitant and is without any basis. Therefore, the impugned order needs to be set aside. In support, the appellant has placed reliance upon the judgment in Golden Chariot Airport case (Supra) and the order of Hon'ble Delhi High Court in M/s Mahalaxmi and Others vs ITDC & Anr. The appellant has also contended that the Estate Officer even erred in awarding interest @12% per annum in contravention of Section 7(2A) PP Act.
7.1 Ld. Counsel for the respondent in this respect has submitted that the damages are justified and are in accordance with law. It is also pleaded that the appellant failed to produce any document before the Estate Officer in support of lesser damages. He also submitted that the licence deed provides for interest @18% per annum, in case of default in payment of the licence fee by the licencee. Thus, there is no infirmity in the Estate Officer's order PPA No. 189/2016 M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 12 of 19 awarding interest @12% per annum.
7.2 Before examining the rival contentions, let me refer to sub sections (2) and (2A) of Section 7, which talk about assessment of damages and the rate of interest. Same read as under :
"7. Power to require payment of rent or damages in respect of public premises. (2) Where any person is, or has at any time been, in unauthorised occupation of any public premises, the estate officer may, having regard to such principles of assessment of damages as may be prescribed, assess the damages on account of the use and occupation of such premises and may, by order, require that person to pay the damages within such time and in such instalments as may be specified in the order.
[(2A) While making an order under subsection (1) or subsection (2), the estate officer may direct that the arrears of rent or, as the case may be, damages shall be payable together with simple interest at such rate as may be prescribed, not being a rate exceeding the current rate of interest within the meaning of the Interest Act, 1978 (14 of 1978).] 7.2.1 As per section 7(2) of PP Act, the damages have to be assessed as per the principles prescribed in that respect. Rule 8 of The Public Premises(Eviction of Unauthorised Occupants) Rules,1971 ( "PP Rules" in short), lay down the matters which PPA No. 189/2016 M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 13 of 19 may be taken into consideration while assessing the damages for unauthorized use & occupation of any public premises. Rule 8 of PP Rules reads as under "8.Assessment of damagesIn assessing damages of unauthorised use and occupation of any public premises the estate officer shall take into consideration the following matters, namely :
(a) The purpose and the period for which the public premises were in unauthorised occupation,
(b) The nature, size and standard of the accommodation available in such premises;
(c) The rent that would have been realised if the premises had been let on rent for the period of unauthorised occupation to a private person;
(d) Any damage done to the premises during the period of unauthorised occupation;
(e) Any other matter relevant for the purpose of assessing the damages."
7.2.2 Thus, while assessing damages, the purpose, nature, size, standard of the accommodation and the rent it would have fetched etc. need to be taken into account while arriving at the quantum of damages for unauthorized occupation of public premises. Further, as per Section 7(2A) PP Act, the rate of interest which can be awarded on damages should not exceed the current rate of interest.
PPA No. 189/2016M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 14 of 19 7.2.3 "Current rate of interest" is defined in clause (b) of Section 2 of Interest Act, 1978, which reads as under :
(b) "Current rate of interest" means the highest of the maximum rates at which interest may be paid on different classes of deposits (other than those maintained in savings account or those maintained by charitable or religious institutions) by different classes of scheduled banks in accordance with the directions given or issued to banking companies generally by the Reserve Bank of India under the Banking Regulation Act, 1949(10 of 1949)".
7.3 It is seen from the Estate Officer's record that vide its application under Section 7 PP Act, the respondent No.1/ITDC prayed for recovery of outstanding amount of Rs. 2,22,93,565/ w.e.f. 01.04.1998 to 31.12.2010 plus the subsequent damages @ Rs.500/per sq. ft. per month till handing over of the vacant possession of the said shop. It also claimed interest pendente lite and future @18% per annum. The same was contested by the appellant herein.
7.3.1 Let me now see as to how the rival contentions were dealt with by the Estate Officer; and whether the Estate Officer kept PPA No. 189/2016 M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 15 of 19 in mind the above Criteria while determining the damages and rate of interest as awarded by him. The relevant portion of the impugned order reads as under :
".....The case of the applicant is...... from 01.04.1998, the respondent is in unauthorised occupation of the licensed premises. The applicant served a Legal Notice dated 09.08.2010 upon the respondent on 12.08.2010 through Reg. AD post and the respondent was called upon to vacate the licensed premises and to pay uptodate damages @ Rs.500/ per sq. ft. per month to the applicant from 01.04.1998 but the respondent despite of receiving the notice neither vacated the licensed premises nor made the payment. The respondent is liable to pay the damages @Rs.500/ per sq. ft. per month to the applicant from 01.04.1998 after adjusting the payment already made by the respondent.
.... The respondent denied that the license in respect of shop in question had been renewed w.e.f. 01.04.1995 @ Rs.2,88,000/ per annum. The respondent further denied the issuance of letter dated 07.03.1997 relied upon by the applicant. The respondent submitted that the license committee of the applicant of its own had fixed the said rate despite protest in this regard by the respondent. The increase sought by the applicant was not only exorbitant but was not even uniform in cases of all licenses. No uniform policy had been framed by the applicant for said purpose and the applicant's officials had acted as per their whim and fancies and contrary to principle of natural justice. The respondent further denied paying the damages @Rs.500/ per sq. ft. per month as claimed by the applicant. Thereafter, both the parties were given opportunity by my Ld. PPA No. 189/2016 M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 16 of 19 Predecessor to lead evidence in support of their respective submissions. In support of its application, the applicant examined one witness namely Shri Anil Kumar, Manager (B&C) of Ashok Hotel who tendered his affidavit into evidence and was crossexamined by the counsel of the respondent. The witness Mr. Anil Kumar in his statement supported the claim of the applicant. On the other side, the respondent in its defence did not produce any witness to rebut the claim of the applicant though the opportunity was given to him....... The respondent, however, filed an application for directing the applicant to produce the record pertaining to other licensees M/s Sidhartha Export and M/s Rajasthan Jewels Palace. On the direction of this Forum, the applicant produced the summoned record and which was taken on record and marked as R1 to R5. Thereafter, the respondent submitted that they do not want to lead any other evidence. This Forum heard both sides at length and written submission were also submitted by both sides......
.....
I have gone through the entire record the case and heard both the parties.....
On the basis of ongoing discussions, documents etc. and evidence led before this Court, I, therefore, in exercise of the powers conferred upon me under the Public Premises (Eviciton of Unauthorized Occupants) Act, 1971 hold that the respondent is an unauthorized occupant over the shop in question from 01.04.1998 and order that the respondent is liable to pay the damages of Rs.2,22,93,565/ (Rs. Two Crore, twenty two lakhs, ninety three thousand, five hundred and sixty five only) to the applicant as on 31.12.2010 and the damages PPA No. 189/2016 M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 17 of 19 subsequently @Rs.500/ per sq. ft. per month from 01.01.2011 till the vacant and peaceful possession of shop in question is handed over by the respondent. The respondent is further liable to pay interest on the above said amount @12% p.a. from 01.01.2011 till its final payment.
The respondent is hereby directed to make the above mentioned payment within thirty days of this order.
....."
7.4 From the plain reading of the impugned order, it is evident that the Ld. Estate Officer after simply mentioning the submissions made, documents produced/ evidence led by both the sides proceeded to award damages @ Rs.500 per sq. ft. per month, as claimed by the respondent. He did not examine the material and record his findings. No reason has been assigned by the Estate Officer for arriving at the conclusion of awarding of damages @ Rs.500/ per sq. ft. p.m. Nor has he mentioned any reason for awarding interest @12% per annum. In view of these facts and circumstances, the matter calls for reconsideration by the Estate Officer to pass a reasoned order after duly examining the submissions already made/ evidence led by both the sides.
8.0 In view of the above, matter is remanded back to the Estate Officer. Both the parties shall appear before the Estate PPA No. 189/2016 M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 18 of 19 Officer on 24.12.2018 at 02:00pm. No further notice shall be issued by the Estate Officer.
9.0 Estate Officer's record be returned along with copy of this judgment.
10.0 Appeal file be consigned to Record Room.
Digitally signed by POONAM POONAM A BAMBA
A BAMBA Date: 2018.12.11
16:55:30 +0530
Dictated and Announced in the open (Poonam A. Bamba)
th
Court on this 11 day of December, 2018 District & Sessions Judge
New Delhi
PPA No. 189/2016
M/s Cottage Arts Emporium Vs ITDC & Anr. Page No. 19 of 19
PPA No. 189/2016
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