Delhi High Court
M/S Sdb Intrastructure Pvt. Ltd vs Dda & Anr on 29 September, 2016
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 29th September, 2016
+ W.P.(C) No.684/2002
M/S SDB INTRASTRUCTURE PVT. LTD. ..... Petitioner
Through: Mr. H.L. Tiku, Sr. Adv. with Mr.
Shubhankar Sengupta and Mr. Rajesh
Bhardwaj, Advs.
Versus
DDA & ANR. ..... Respondents
Through: Mr. Dhanesh Relan and Ms. Akshita
Manocha, Advs. for DDA.
CORAM:-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. The petition (i) impugns the letter dated 8th September, 1989 of the
respondent Delhi Development Authority (DDA) (respondent no.2 is the
Vice Chairman of the DDA) requiring the petitioner to hand over the
possession of plot no.5, District Centre, Bhikaji Cama Place, New Delhi
with the superstructure standing thereon to the respondent DDA; (ii)
impugns the letter dated 30th April, 1999 of the respondent DDA calling
upon the petitioner to remove the breaches of the terms and conditions of
auction of the aforesaid plot failing which action for cancellation of the bid
of the petitioner with respect to the said plot shall be initiated; (iii) seeks a
mandamus commanding the respondent DDA to execute the lease deed of
W.P.(C) No.684/2002 Page 1 of 23
the land underneath the aforesaid plot directly in favour of the sub-allottees
or alternatively in favour of the petitioner; and, (iv) seeks a mandamus to the
respondent DDA to accept the ground rent tendered by the petitioner from
time to time.
2. It is inter alia the case of the petitioner (i) that in the auction held by
the respondent DDA on 7th February, 1981 of plot no.5, Bhikaji Cama Place,
New Delhi, the bid of the petitioner being the highest was accepted and upon
the petitioner paying the entire consideration, the actual physical possession
of the plot was delivered to the petitioner on 9 th September, 1981; (ii) that
the petitioner raised a multi-storied commercial building on the said plot of
land in accordance with the sanctioned building plan; (iii) that the building
contains approximately 350 separate and distinct units and which were
sought to be conveyed and sold by the petitioner to different persons; (iv)
that the petitioner called upon the respondent DDA to execute the lease deed
of the land in accordance with the terms and conditions of auction; (v) that
the petitioner, under the Delhi Apartment Ownership Act, 1986 (Apartment
Act) also was under an obligation to execute the sub-leases in favour of
allottees to whom different flats/shops/spaces in the building had been
allotted by the petitioner; (vi) that the respondent DDA instead of executing
W.P.(C) No.684/2002 Page 2 of 23
the lease deed, issued a notice dated 25th November, 1988 asking the
petitioner to show cause why the auction bid should not be cancelled in view
of deviations in construction; (vii) the respondent DDA issued another show
cause notice dated 27th April, 1989 under Section 30(1) of the Delhi
Development Act, 1957 (DDA Act) -the unauthorised deviations mentioned
therein were of the kind which had been made by the flat buyers after the
completion of construction and allotment of different flats to them and the
petitioner was not to blame therefor; (viii) that the petitioner has already
parted with the entire premises to various flat owners and the petitioner
could not control the unauthorised constructions by the said flat buyers; (ix)
similar notices dated 7th June, 1989 and 11th July, 1989 were also issued by
the respondent DDA to the petitioner; (x) the respondent DDA ultimately
vide impugned letter dated 8th September, 1989 cancelled the bid and
forfeited the money and directed the petitioner to hand over possession of
the plot together with superstructure; (xi) however no proceedings for taking
over possession were taken by the respondent DDA and on the contrary
another show cause notice dated 20th September, 1989 under Section 30(1)
of the DDA Act was issued; (xii) on the request of the petitioner, a joint
inspection of the premises was carried out on 17th January, 1990 and the
W.P.(C) No.684/2002 Page 3 of 23
petitioner represented that the deviations alleged by the respondent DDA
were beyond its control; (xiii) yet another show cause notice dated 30th
April, 1991 was issued by the respondent DDA to the petitioner asking the
petitioner to remove the breaches within 15 days failing which the bid of the
petitioner will be cancelled; (xiv) that from the issuance of the notice dated
30th April, 1991 it was evident that the earlier notice dated 8 th September,
1989 had been withdrawn by the respondent DDA; (xv) that if there is any
misuse or unauthorised construction in any part of the building, the
respondent DDA is at liberty to take action with respect thereto; (xvi) that
the petitioner after having sold different flats in the building is left with no
interest therein but remains liable for payment of ground rent; (xvii) though
the petitioner from time to time tendered ground rent to the respondent DDA
but the same was refused and on the contrary a demand for ground rent was
raised; and, (xviii) that the petitioner offered to pay an amount of
Rs.76,21,298/- towards ground rent but the same has not been accepted.
3. The petition came up first before this Court on 30th January, 2002
when notice thereof was issued. Rule was issued in the petition on 25th
September, 2002 and it was directed that it will be open to the petitioner to
deposit the ground rent and the same be accepted by the respondent DDA
W.P.(C) No.684/2002 Page 4 of 23
without prejudice to the rights and contentions of the parties. Repeated
opportunities were taken by the respondent DDA to file reply/counter
affidavit stating that the files pertaining to the subject property were with the
Central Bureau of Investigation (CBI). Vide order dated 24th February, 2004
CBI was directed to hand over the relevant records to the respondent DDA.
However it appears that the original record was stated to be not traceable.
4. Vide order dated 8th October, 2004 respondent DDA was directed to
inspect the building and to report whether it was the petitioner who had
violated the terms of the bid/auction or the persons who had purchased
office spaces/flats in the building had violated the same and to file counter
affidavit on the basis thereof.
5. The respondent DDA in its counter affidavit pleaded (i) that the
petitioner raised construction in violation of the sanctioned plan and
therefore the bid of the plot was cancelled under Clause II (4)(a)(b) and the
petitioner was vide impugned letter dated 8th September, 1989 called upon to
deliver possession; (ii) that the cancellation was for the reason of (a) lower
ground floor being used as offices; (b) several offices unauthorisedly
functioning in the basement; (c) front internal road of the side of the path on
W.P.(C) No.684/2002 Page 5 of 23
the main road having been encroached; and, (d) public corridor having been
encroached in the upper ground floor and the upper ground floor being used
for shop/office purposes; (iii) that the petitioner, as per the terms of auction
was required (a) to within two years of being put in possession of the plot
raise construction in accordance with the sanctioned building plan and
design plans and to submit a report and to not commence construction before
execution of the lease deed; and, (b) not use the plot or the building for the
purpose other than specified; (iv) that as per control drawings; (a) the
prescribed user of the basement was for servicing and storage like plant,
machinery, equipment and water tanks; (b) the prescribed user of the lower
ground floor was for parking for cars, cycles, scooters, reception & entrance
areas, plant machinery and stores; (c) the prescribed user of the upper
ground floor was for retail shopping and for pedestrian movement; (d) the
prescribed user of the first floor was for retail shops, public relation offices,
banks, travel agents etc.; (e) the prescribed user of the second to the fourth
floor was offices/commercial/guest house; and, (f) the prescribed user of the
roof was for lift room, plant, storage, water tanks; (v) however both, the
basement and the lower ground floor, were found as being used as offices
and in the upper ground floor the public corridor had been encroached and
W.P.(C) No.684/2002 Page 6 of 23
shops/offices constructed thereon; (vi) that the balconies of the upper floors
had been covered and were being misused; (vii) common areas had been
encroached; (viii) unauthorised construction had been made at the terrace;
(viii) that it is evident that it is the petitioner who had made the unauthorised
construction and sold the same - without construction the same could not
have been put to unauthorised use; (ix) the petitioner had also committed
breach of terms and conditions by selling the spaces within the building
without seeking any permission in accordance with the lease deed; and, (x)
keeping the larger interest in mind, the respondent DDA can consider
restoration of allotment on the condition of removal of all unauthorised
construction and misuse and payment of ground rent and other requisite
charges thereof.
6. Though the petitioner is found to have filed a rejoinder to the
aforesaid counter affidavit but the same merely reiterates the contents of the
petition.
7. The respondent DDA in additional affidavit filed in response to the
order dated 27th February, 2007 has informed (i) that as per procedure of the
department, after cancellation of allotment the allottee is asked to hand over
W.P.(C) No.684/2002 Page 7 of 23
possession and if fails to hand over possession, the case is referred to Estate
Officer for eviction proceedings but in the present case no reference to the
Estate Officer appears to have been made; (ii) that the impugned notice
dated 30th April, 1991 was inadvertently issued and was withdrawn by letter
dated 30th April, 1993; (iii) the Building Department had also issued the
notices dated 20th September, 1989 and 4th January, 1990 with respect to
partition walls constructed unauthorisedly in the basement, offices and shops
having been unauthorisedly constructed in the car parking area in the lower
ground floor, a car showroom having been unauthorisedly built in the car
parking area in the lower ground floor, corner shops having been
unauthorisedly constructed along public corridor at upper ground floor,
toilets on the upper ground floor having been unauthorisedly converted into
shops, eight rooms having been unauthorisedly constructed on the terrace
floor; (iv) that w.e.f. 26th November, 1997, the building activities of the area
stood transferred to Municipal Corporation of Delhi (MCD) and hence
action in respect of building bye-laws has to be taken by the MCD; (v) that
as per the inspection of the building on 2nd April, 2007 also, unauthorised
construction and misuse existed; (vi) that the plea of the same being done by
the allottees/purchasers is false as without the petitioner selling the spaces,
W.P.(C) No.684/2002 Page 8 of 23
the question of there being misuse would not have arisen; and, (vii) that as
per the terms of auction/bidding, the petitioner was to remain responsible
even after transferring the floors/spaces and that the petitioner thus cannot
absolve itself of the responsibility.
8. Vide order dated 19th March, 2008 the petitioner was directed to
inform whether there is any flat buyers' association and on 18th September,
2008 it was reported that there is no registered association of flat buyers.
9. The petition, on 19th December, 2012 was dismissed in default of
appearance of the petitioner but on application moved by the petitioner, was
on 3rd July, 2013 restored to its original position. On 1 st September, 2015 the
counsel for the petitioner again stated that the petitioner desired to amicably
resolve the matter with the respondent DDA. Apparently no settlement was
reached. The counsels were heard on 18th May, 2016 and judgment reserved.
10. The senior counsel for the petitioner, during the hearing, relied on:-
(i) K.K. Birla Academy Vs. D.D.A. 115 (2004) DLT 361 - where
in the context of Delhi Development Authority (Disposal of
Developed Nazul Land) Rules, 1981 it was held that once
Nazul land is allotted and premium is paid, an indefeasable
W.P.(C) No.684/2002 Page 9 of 23
right to the land is created in favour of the allottee and the
allottee is entitled to execution of a lease in its favor and such a
vested right can be taken away only by law.
(ii) Shanti memorial Society Vs. Union of India 142 (2007) DLT
787 where, finding no justification for DDA, after accepting
premium, not executing the lease deed, mandate to execute the
lease deed was issued.
(iii) Sant Ram Sodhi Vs. Lt. Governor 119 (2005) DLT 386 where,
finding the breaches and violation of the lease deed averred by
the DDA to be not attributable to the lessee but to the tenant of
the lessee and against whom lessee had taken court
proceedings, the demand of the DDA for charges for such
misuse as condition for converting leasehold rights in the land
into freehold was set aside.
(iv) Ram Prakash (Prof.) Vs. D.D.A. 2007 VIII AD (Delhi) 313
holding that DDA can levy misuse charges provided it adopts a
reasonable and fair procedure consistent with the principles of
W.P.(C) No.684/2002 Page 10 of 23
natural justice and exercises such powers within reasonable
time.
11. In the present case, neither is it the plea of the petitioner nor is any
document pointed out to show that the land which was auctioned is Nazul
land. Without the same, reliance by the senior counsel for the petitioner on
the first of the aforesaid judgments is misconceived. I may record that it is
not as if all lands at disposal of DDA are Nazul land.
12. The petitioner herein came into possession of the land aforesaid by
virtue of being the highest bidder during the auction of the said land. The
following clauses of the terms and conditions of auction are relevant for the
present purpose:-
"4. SALIENT CONDITIONS OF LEASE DEED:
(i) ....The intending purchaser shall execute the
lease deed in the said form when called upon to
do so.
(ii) The following are the other main conditions of
the lease-
(a) The lessee shall have to erect and
complete the building within two years
from the date of the offer of the
possession of the plot, in accordance
with the type, design and other
architectural features prescribed by the
W.P.(C) No.684/2002 Page 11 of 23
Delhi Development Authority after
obtaining and in accordance with the
sanction to the building plan with
necessary design plans and
specifications from the proper Municipal
or the other authorities concerned in
accordance with their respective rules,
bye-laws etc., as the case may be. The
lessee shall not start construction before
the said Plans etc., are duly sanctioned
by the Authorities aforesaid. The lessee
shall also submit a project report within
one month from the date of possession.
The project report shall indicate the
schedule of completion of various stages
of construction. However, the auction
purchaser shall not be allowed to start
any activity connected with the
construction work before execution of
the lease-deed.
(b) The plot or building thereon shall not be
used for a purpose other than that as
specified.
(c) The lessee shall not be entitled to sub-
divide the plot or to amalgamate it with
any other plot.
(d) The lessee will also not be entitled to
dispose of, sublet or transfer the plot
before or after the erection of the
building without the prior permission of
the Authority.
In the event of permission being granted,
50% of the unearned increase in the
value of the land i.e. the difference
between the premium paid and the
W.P.(C) No.684/2002 Page 12 of 23
market value of the land at the time of
transfer of the plot would be paid to the
Delhi Development Authority.
The lessee may, with the previous
consent in writing of the lessor,
mortgage or charge the plot to the Life
Insurance Corporation, a Scheduled
Bank or such other financial agency as
may be approved by the lessor in his
absolute discretion.
.............
(h) The intending purchaser shall also
ensure that the purchasers of floor area
units in the building observe the general
conditions of lease entered into between
the lessor and the lessee. The intending
purchaser of the floor area shall not use
or cause to be used the unit/any portion
thereof for any purpose whatsoever
other than an office for business
purposes nor shall he use or cause to be
used for said unit/in such manner which
may or is likely to cause nuisance or
annoyance to the occupiers of any other
adjoining and neighbouring properties.
Nor shall he use the said unit for any
illegal, immoral purposes or for any
residential purposes.
5. OTHER CONDITIONS:
The lessee may sublet the whole or part of the
building that may be erected upon the plot for
the purpose specified in the terms & conditions
of the original lease. The lessee may also, with
prior permission of the DDA in writing, sell or
W.P.(C) No.684/2002 Page 13 of 23
transfer the floor space constructed on the plot.
The written permission will be granted on
payment of Rs.100/- for each case of
sale/transfer provided such a transaction does
not violate the said terms & conditions. For
sale/transfer subsequent to the first sale of the
floor space units, the permission of the DDA
shall be required which will be given after
charging by the Authority @ Rs.5/- per sq. ft. of
the floor space to be transferred.
The lessee shall also be responsible, after
transferring/selling the floor space to ensure
that the transferee/buyer does not violate these
terms and conditions.
The lessee will make such arrangements as are
necessary for the maintenance of the building
and common services.
8. DELIVERY OF POSSESSION OF PLOTS
AND EXECUTION OF LEASE:
The possession of the plot shall be handed over
to the intending purchaser. After the payment of
the balance of the premium and the other
amounts payable under these conditions.
Thereafter, the lease shall be executed and
registered."
13. Admittedly no lease deed has been executed in favour of the petitioner
till now. The status of the petitioner with respect to the aforesaid land thus
remains as of an allottee. If the petitioner is in violation of any of the terms
and conditions on which it was allotted the land and put into possession
thereof, the respondent DDA would be entitled to cancel the allotment
W.P.(C) No.684/2002 Page 14 of 23
and/or refuse to execute the lease deed and call upon the petitioner to deliver
possession of the land and if the petitioner fails to do so, to take appropriate
legal proceedings in that respect. The only effect of the land, if is Nazul land,
would be that a lease would be deemed to have been executed and the
respondent DDA would be required to take proceedings as of cancellation of
the lease.
14. It is however the case of the petitioner that it has already sold each
and every inch of the built-up space on the said plot of land and received
consideration thereof. The petitioner thus, upon selling the entire built-up
space is not left with any stake in the said building save for profiteering from
maintaining common areas and services of the said building and would not
really be prejudiced by an action of the respondent DDA, even if of
cancellation of the allotment and resumption of the said plot; the only
prejudice to the petitioner, may be, would be of the persons to whom it has
sold the said spaces making claims against the petitioner. The real sufferers
of such an action of the respondent DDA would be the purchasers of
different flats/spaces from the petitioner who have paid market price therefor
to the petitioner. It is such persons who, inspite of paying the full
W.P.(C) No.684/2002 Page 15 of 23
consideration, would be dispossessed from the immovable property which
they purchased.
15. The respondent DDA of course has pleaded that no permission as
required was obtained by the petitioner for effecting such sales and the
charges required to be paid to the respondent DDA therefor have also not
been paid. However the fact remains that the respondent DDA did not put in
place appropriate mechanism therefor. The builders/real estate developers as
the petitioner bid for such plots as the subject matter of the present petition,
not for their own use but for commercial exploitation. In fact flats/spaces in
the proposed buildings are often marketed and sold immediately after
acceptance of the bid and without even a brick being laid on the plot of land.
The respondent DDA, once was permitting sale of spaces/flats in the
proposed building, ought to have built in the price thereof the charges
therefor and/or prohibited such sale/transfer. Once the terms of auction
permit such sale/transfer, the purchasers of flats/spaces from the petitioner
presume the requisite formalities therefor having been fulfilled and cannot
be made to suffer for non-fulfillment thereof by the petitioner. I repeat that
the effect of holding such sales/transfer of plots/spaces in the building by the
W.P.(C) No.684/2002 Page 16 of 23
petitioner to be also unauthorised would fall on the purchasers and not on the
petitioner.
16. The situation as has arisen with respect to the subject building is
prevailing in a large number of other multi-storied buildings
constructed/developed on other lands allotted/transferred/sold by the
respondent DDA and other such public authorities or even on private lands.
The public authorities as the DDA have turned a blind eye thereto and not
taken any remedial steps and left the public to be exploited by the
builders/real estate developers.
17. I entertain no doubts whatsoever that the violations pleaded by the
respondent DDA and on the basis whereof the respondent DDA has also
taken the actions impugned in this petition are of the making of the
petitioner. Had the petitioner left the basement and the lower ground floor
for uses as permitted and not constructed shops/flats therein and not sold the
same, the question of misuse thereof would not have arisen. Similarly, had
the petitioner not encroached upon the public passages on the upper ground
floor by constructing shops/flats therein and not converted the common
toilets therein into flats the same would not have existed. It cannot be lost
W.P.(C) No.684/2002 Page 17 of 23
sight of that the petitioner, till the date of arguments, admitted to be carrying
out the work of maintenance of common areas and services in the building
and collecting charges therefor from the persons to whom the flats/spaces
had been sold and/or tenants inducted by them. Had the petitioner not itself
made the aforesaid deviations, the petitioner would not have allowed such
deviation to come up.
18. However the fact still remains that the effect of dismissal of the
petition and allowing the respondent DDA to resume the land would be to
the prejudice of the purchasers who have bought valuable flats/spaces in the
building by paying the price thereof to the petitioner. The prejudice to the
petitioner would be only that the petitioner would not be able to profiteer
from carrying out maintenance of common areas and services in the
building.
19. Fortunately, I have been approached with the problem aforesaid in
jurisdiction under Article 226 of the Constitution of India and which gives
me enough leeway to find a lasting and practical solution to the problem. I
am of the view that a solution to the problem which ensures (i) that the
unauthorised constructions/deviations/misuse are removed/stopped; (ii) that
W.P.(C) No.684/2002 Page 18 of 23
the charges due to the DDA including towards ground rent and for
permission for sale are recovered; and, (iii) the bona fide purchasers of
flats/spaces from the petitioner do not suffer, is the need of the hour.
20. I am however of the view that the purchasers from the petitioner of
flats/office spaces which are unauthorised or are constructed over/in portions
meant for common use cannot fall in the category of bona fide purchasers.
Thus no leniency can be shown to them. Their remedies if any are against
the petitioners. Similarly, the purchasers of flats/spaces from the petitioner,
even if have paid the dues of the respondent DDA attributable to their
respective space/flat to the petitioner, cannot deny payment thereof to the
respondent DDA as the said dues would be a charge on the said flat/space
and if not paid, the respondent DDA would be entitled to resume the
possession of respective office space/flat.
21. This Court has already vide judgments dated 28th May, 2010 reported
as (2010) 172 DLT 442 (DB) and 13th July, 2012 reported as (2012) 194
DLT 138 (DB) in W.P.(C) No.1959/2007 titled O.S. Bajpai Vs. The
Administrator (Lt. Governor of Delhi) and in W.P.(C) No.8705/2011 titled
S.C. Oberoi Vs. Land & Development Officer issued directions to the
W.P.(C) No.684/2002 Page 19 of 23
bodies such as the respondent DDA for execution of deeds of apartment with
respect to spaces/flats in such multi-storied building. There is no reason as to
why the said judgments of the Division Bench of this Court should not be
implemented qua the subject building and with which implementation the
controversy subject matter of this petition would also stand resolved.
22. I therefore dispose of this petition with the following directions:-
(i) The petitioner to within two months hereof deposit with the
respondent DDA all amounts by way of ground rent or
otherwise collected by it from the owners/occupiers of
flats/spaces in the aforesaid building and the respondent DDA
to accept the same.
(ii) The petitioner to at the time of making the aforesaid deposit
also file an affidavit with the respondent DDA to the effect that
it is not holding any amount whether by way of ground rent or
otherwise collected from the owners/occupiers of flats/spaces in
the aforesaid building and the petitioner is restrained from
hereafter collecting any amount towards ground rent or
W.P.(C) No.684/2002 Page 20 of 23
otherwise from the owners/occupiers of flats/spaces in the
aforesaid building.
(iii) The respondent DDA to within two months hereof carry out a
detailed survey of the building aforesaid and to have prepared
detailed drawings of the building including of each floor of the
building, identifying by measurement the flats/spaces therein
and the name and other particulars of the persons who are
claiming to own the same.
(iv) The petitioner to within two months aforesaid file another
affidavit with the respondent DDA giving the names and
particulars of the persons who as per the record of the petitioner
are the purchasers/owners of different flats/spaces in the
aforesaid multi-storied building.
(v) The respondent DDA to thereafter, in accordance with the
prevalent Rules & Regulations, Bye-laws assess which parts of
the building are unauthorised or in misuse and whether such
unauthorised construction/misuse can be regularized/condoned
and if so on what terms and to intimate the owner of such
W.P.(C) No.684/2002 Page 21 of 23
flats/spaces having unauthorised construction or the misuse, of
the same and to thereafter take action in accordance with law
with respect thereto.
(vi) The person/s affected by the action aforesaid of the respondent
DDA shall have their remedies in law against the petitioner as
well as against the respondent DDA.
(vii) The respondent DDA to thereafter also apportion its dues with
respect to the aforesaid building and/or construction thereon
amongst the different flats/spaces as per area thereof and to
raise a demand on the owners of individual flats/spaces and if
they fail to pay the same to resume such space/flat and to deal
with the same as may be deemed fit by the respondent DDA.
(viii) The concerned competent authority under the Apartment Act of
the respondent DDA to also initiate steps in conjunction with
the owners of flats/spaces in the aforesaid building to form an
Association of Apartment Owners within the meaning of the
Apartment Act aforesaid to take over the maintenance of
W.P.(C) No.684/2002 Page 22 of 23
common areas and services in the building and the petitioner is
directed to do the needful in that regard.
(ix) The respondent DDA to in accordance with O.S. Bajpai supra
also initiate steps for execution of deed of apartments in favour
of the purchasers of flats/spaces in the aforesaid building who
have paid all their dues to the respondent DDA and the
petitioner is directed to co-operate in all respects in that regard.
23. The parties are left to bear their own costs.
RAJIV SAHAI ENDLAW, J.
SEPTEMBER 29, 2016 'pp' W.P.(C) No.684/2002 Page 23 of 23