Calcutta High Court (Appellete Side)
Austin Distributors (P) Ltd. & Anr vs The State Of W. B. & Ors on 1 July, 2010
Author: Indira Banerjee
Bench: Indira Banerjee
1
2.
01.07.2010.
d.d.
W. P. No.449 (W) of 2010
Austin Distributors (P) Ltd. & Anr.
Vs.
The State of W. B. & Ors.
Mr. S. N. Mookherjee, Sr. Adv.,
Mr. D. Kundu,
Mr. S. Basu,
Mr. Supratim Laha,
Mr. A. Choudhury
.......... For the Petitioners.
Mr. P. S. Basu,
Mr. S. Talukdar
.......... For the K.M.D.A.
In this writ application, the petitioners have challenged a
communication being Memo No.2346/KMDA/MM/BP-1/99 dated 5th
November, 2009, which is extracted hereinbelow for convenience:
" In pursuance of your letter dated 12.10.99, I am
directed to inform you that the Competent Authority in KMDA
has directed you to deposit the penal amount within one
month from the date of issue of this letter in respect of Plot
No.I-10 B at Block-P under BPADP, failing which, the plot may
be liable for cancellation. "
The facts giving rise to the writ application are very briefly as
follows.
The petitioner no.1 has been granted lease of a plot of land
measuring about 9.99 cottah being Plot No.1/I-10B, Block-P,
2
Baishnav Ghata, Patuli Area Development Project, District:24-
Parganas (South), hereinafter referred to as 'the said plot'.
The said plot has apparently been leased out to enable the
petitioner no.1 to set up a showroom-cum-service centre. The
petitioner is constructing a six-storeyed building at the said
premises, which is nearing completion.
On 24th July, 2001, a deed of lease was apparently executed by
and between the petitioner no.1 and the respondent no.5, hereinafter
referred to as 'KMDA'.
On 31st December, 2001, a deed of declaration/rectification was executed making certain corrections in the plot number as given in the original lease deed.
According to the petitioners, possession of the said plot was made over to the petitioner5s on 19th July, 2000. In terms of Clause 1(b)(iii) of the deed of lease, the petitioner no.1 was required to complete construction on the said plot within a period of three years from the date of formal allotment or within such further time as the authority might, at its option, allow in writing on sufficient and reasonable grounds.
According to the petitioners, soon after execution of the lease deed, the petitioners applied for building permit and sanction of building plan. The application was apparently made on 12th September, 2002. After much deliberation, exchange of correspondence, the petitioners were required to revise the plan and ultimately, on 18th April, 2006, the Municipal Building Committee recommended the plan for sanction, subject to "No Objection 3 Certificates" from the West Bengal Fire Service Department and the Traffic Police.
The petitioners contend that the requisite "No Objection Certificates" were issued on 5th June, 2006 and 7th June, 2006 respectively. Upon deposit of Rs.45,37,372/- by way of charges for obtaining sanction of building plan, building plan was sanctioned on 10th January, 2007. Thereafter, the petitioners started taking steps for commencing construction.
However, a notice being Memo No.75/KMDA/MM/BP-1/99 dated 10th April, 2008 was issued requesting the petitioners to attend a hearing before the concerned authority of KMDA with all documents pertaining to the status of construction and also the sanctioned building permit/plan for the said plot. By the aforesaid notice, the petitioners were reminded that the lease deed had been executed on 24th July, 2001 and in terms of the lease deed, the petitioners were required to take up construction within three years of the lease deed.
The petitioners claim to have attended the hearing. According to the petitioners, the petitioners explained the status of construction work on the said plot as also the reasons for the delay in commencement of construction.
This Court exercising jurisdiction under Article 226 of the Constitution of India, prima facie cannot investigate into the reasons for the delay in commencing the construction work. The fact remains that KMDA did not reject the grounds of delay disclosed by the petitioners. Further notices were issued to the petitioners. The petitioners were required to attend the chamber of the Joint Secretary, M & M Unit, KMDA for hearing along with work schedule.
4However, a notice being 1930/KMDA/MM/BP-1/99 dated 16th September, 2009 was issued whereby the competent authority allowed extension of time upto January, 2010 to the petitioners for completion of construction work, subject to payment of penalty at the rate of 10% of the current land value which was assessed at Rs.15.00 lakhs per cottah.
Thereafter, the impugned Memo dated 5th November, 2009 was issued.
It is not for this Court to assess the plausibility and/or sufficiency of the reasons for the delay in commencement and/or completion of construction. In this case, KMDA and/or its officials decided to grant extension of time, but on condition of payment of penalty that worked out to a sum of Rs.15,00,000/-, as per computation of the land value made by KMDA. Prima facie, the imposition of penalty was unauthorized and not supported by law.
Mr. Basu, appearing on behalf of the respondent authorities, submitted that this writ application, in which the issues arise out of a contract, ought not to be entertained. Mr. Basu argued that the issues were covered by a judgment and order of a learned Single Bench of this Court in Haldiram Limited Vs. The State of West Bengal & Ors., reported in (2009) 1 Cal LT 158 (HC), which has been affirmed by a Division Bench of this Court.
The judgment was rendered in the particular facts and circumstances of the case of Haldiram Limited where there was no concluded lease, but only a license.
5The prayers in the writ petition have been set out in the first paragraph of the judgment and it is apparent that the petitioner in that case, that is Haldiram Limited, was seeking orders directing the respondents to execute lease deed in favour of Haldiram Limited in respect of the plot in issue in the aforesaid case. What was under
challenge was an order cancelling the license deed.
As pointed out by Mr. S. N. Mookherjee, Senior Counsel, appearing on behalf of the petitioner no.1, in the case of Haldiram Limited (supra), this Court, inter alia, held as follows:
" In my view, the test that should be applied for getting answer to the question is what is the basis of the action complained of. If the action is taken in exercise of any power or right the sole source whereof is not the contract itself, then a writ petition questioning the action is maintainable. "
In the instant case, prima facie, the lease deed does not authorize the KMDA to impose penalty for extension of time. The action complained of is not in exercise of any power or right, the sole source whereof is the contract.
In course of hearing today, Mr. Basu, appearing on behalf of the respondents, handed over in Court a copy of Memo No. /KMDA/MM/BP-1/99, apparently signed on 5th June, 2010, whereby the lease deed has purportedly been terminated. The petitioners have been informed that the amount, paid by the petitioners, would be refunded after deduction of 20% towards service charges.
According to the learned Counsel, appearing on behalf of the petitioners, the aforesaid communication has not been received by 6 the petitioners. Be that as it may, the penultimate paragraph of the said communication is extracted hereinbelow for convenience:
" As per rule of KMDA penalty is be applicable in all cases where the allottee has violated the terms and conditions of the lease deed for commencing or completing construction. As you had violated the period within which the construction is to be completed and as the Competent Authority of KMDA had allowed extension of time a penalty @ 10% on the current land price i.e. Rs.15.00 lakhs per cottah was charged vide our letter dated 16.09.2009. You did not make payment despite our reminder letter dated 05.11.09. "
The purported termination is on the ground of non-payment of the penalty of Rs.15.00 lakhs. It is claimed that as per the rules of KMDA, penalty might be imposed. However, no rule authorizing imposition of such penalty could be shown.
Prima facie, the petitioners have made out a strong case for interim relief. Construction of a six-storeyed building has made substantial progress. There will be an interim order of injunction restraining the respondent authorities from interfering with the petitioners' possession of the plot in question for a period of six weeks from date or until further orders, whichever is earlier.
Leave as prayed for by Mr. Kundu, appearing on behalf of the petitioners, to file a supplementary affidavit challenging the termination letter, a copy of which has been made over in Court, is granted. A copy of the supplementary affidavit shall be served on the learned Advocate-on-Record engaged on behalf of the respondents within a week from date.
Affidavit-in-Opposition to the writ petition as also to the supplementary affidavit, if any, be filed within three weeks from date.
7Affidavit-in-Reply thereto, if any, be filed within one week thereafter. Let the matter be listed for hearing on the following working day.
Mr. Basu strenuously contended that this writ application is not maintainable. However, as observed above, in the judgment in Haldiram Limited (supra) on which reliance has been placed by Mr. Basu, the Single Bench held that where the action was not solely based on the provisions of the contract, a writ would lie. The issue is, however, kept open.
Let photostat copies of this order, duly countersigned by the Assistant Registrar (Court), be supplied to the learned Counsel for the appearing parties on usual undertakings.
( Indira Banerjee, J )