Delhi District Court
Nehru Place Hotels Limited vs Delhi Development Authority on 17 March, 2018
IN THE COURT OF MS. VANDANA JAIN, LD. ADJ07, SOUTH EAST
DISTRICT, SAKET COURTS COMPLEX, NEW DELHI
(More than 20 years old)
CS NO. 718/2017
Nehru Place Hotels Limited Vs Delhi Development Authority
In the matter of
Nehru Place Hotels Limited
A company incorporated under the
COMPANIES ACT having its registered
office at International Trade Tower, Nehru Place
........................Plaintiff
Versus
1. Delhi Development Authority
Vikas Sadan, INA Market, New Delhi
(Service through its Chairman or principal officer)
..................Defendants
Date of Institution: 03.01.1997
Date of reserving of Judgment: 05.03.2018
Date of announcing of Judgment: 17.03.2018
Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 1/45
JUDGMENT
1. The brief facts necessary to decide the present suit are as followed:
2. Plaintiff's company had taken a commercial plot in Nehru Place District on perpetual lease deed from the defendant/Delhi Development Authority in a public auction dated 17.03.1976 for a sum of Rs.1 crore and the said bid was accepted by the Delhi Development Authority on 11.05.1976. Twenty five percent (25%) of the amount was paid by the plaintiff immediately on the day of auction itself and rest of the 75% was also paid within the stipulated time period i.e. 14.10.1976.
3. The possession was delivered to the plaintiff on 21.10.1976 and by letter dated 19.10.1976, Delhi Development Authority directed the plaintiff not to raise any construction/digging on the aforesaid plot unless the plans etc was sanctioned by the authority failing which it will be considered a breach of terms and conditions of auction.
4. It is further stated that entire plot was rocky area and minimum one year was required to cut the rocks and complete the excavation before starting construction of any part of the plot. No objection certificate was given by the Delhi Development Authority to the plaintiff vide order dated 02.11.1976 by which it was confirmed that plaintiff had made the entire payment of Rs. 1 crore and possession has been handed over to the plaintiff and Delhi Development Authority has no objection to the plaintiff submitting building plans for construction on the plot in accordance with the building bye law and architectural control.
Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 2/45
5. On receiving the said non objection certificate, the plaintiff submitted that preliminary drawings to the defendant in January 1977 and the same were submitted to Architect Town Planner on 24.01.1977.
6. It is further stated that the plot was of 5 acres and therefore, exemption was required under Urban Land (Ceiling and Regulation) Act which was granted on 21.02.1977. Despite this, no permission was granted to start construction and therefore, plaintiff sent an application dated 15.03.1977 to Commissioner of the Delhi Development Authority inviting his reference to the Deputy Commissioner's letter dated 19.10.1976 and pointed out that the restriction on digging had never been imposed on any other plot sold by the Delhi Development Authority.
7. Vide order dated 11.04.1977, the Executive Officer of defendant rejected the plaintiff's requests for permission to start excavation of the plot stating that same could not be granted unless the plans were duly sanctioned by the building department of the defendant. Despite repeated correspondence, nothing was done by defendant and therefore, a letter dated 11.04.1977 was again sent by plaintiff praying for execution of the lease deed as per agreed term.
8. It is further stated that the defendant was trying to unilaterally change certain important terms and conditions of the lease deed to the serious prejudice of the plaintiff by compelling it to make a much bigger hotel than specified in the conditions of intended lease as agreed upon between the parties resulting in reduction of the area to be covered by commercial space. Therefore, the Vice Chairman of Delhi Development Authority i.e. Lt. Governor of Delhi approved the suggestion to execute the lease deed on the same terms and conditions as originally stipulated subject to the plaintiff's company undertaking to construct Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 3/45 250 bedded hotel and use only the remaining permissible area for ordinary commercial purpose. Though the defendant could not unilaterally change the terms but the plaintiff's company agreed to ensure construction of 250 bed hotel and filed undertaking in this regard after receiving a letter dated 29.11.1977 from the defendant.
9. Thereafter, a perpetual lease deed was executed by the defendant in favour of the plaintiff on 30.11.1977. Plaintiff paid the ground rent for the first three years at the stipulated rate of Rs. 1 per annum on November 29, 1977 for the period of 20.10.1976 to 20.10.1979. Thereafter, the defendant furnished guidelines dated 14.03.1978 after the plans were submitted by the plaintiff in January 1977 itself. Thereafter, the plaintiff submitted the drawings to DUAC (Delhi Urban Arts Commission) on March 22,1978. DUAC conveyed itself final remark to plaintiff vide letter dated 17.05.1978.
10. Before that plaintiff received a letter dated 08.05.1978 by which, defendant withdrew the earlier guidelines. The plaintiff wrote a letter on the same day to withdraw the same letter. Again another set of guidelines was issued which were dated 08.06.1978. Plaintiff was asked to submit the fresh drawings which it submitted under protest on 16.02.1979 and also deposited of Rs.27,600/ as the fee prescribed for sanctioning the plan. Defendant got some modification made and revised plans were submitted on 05.06.1979 and they were finally sent for approval to the DUAC which approved the same by letter dated 24.06.1979.
11. A letter dated 31.07.1979 was again issued by Delhi Development Authority rejecting the revised drawings of the plaintiff on the allegations that the " floor area proposed for commercial use is more than permissible limit of 25% of FAR to be used for commercial purpose". It is stated that there was no such Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 4/45 restriction in the lease deed. In the same letter, the plaintiff was asked to submit fresh plans confirming to the purpose for which the plot has been allotted. It was a illegal act on the part of the defendant. On the directions of Central Government on 04.11.1979, the record of this case was sent by Delhi Development Authority to Central Government wherein the plaintiff filed a detailed representation dated 01.01.1980 and the record was sent by the Central Government to the Delhi Development Authority alongwith a letter dated 28.02.1980 and the original representation of the plaintiff dated 07.01.1980 and asked Delhi Development Authority for its comments on the plaintiff's representation.
12. After considering of the comments of the Delhi Development Authority and the plaintiff representation Central Government ordered on 10.04.1980 that the matter be discussed with the Lt Governor. It was decided in the meetings conducted on July 8, 1980 that the hotel must contain 400 bed and rest of the available space can be utilized by the petitioner for ordinary use.
13. Despite this suggestion by the Central Government, defendant passed a resolution dated 11.08.1980 clearly stating that " Resolved that maximum 17 per cent of the total floor space built up permitted as a commercial and incidental to hotel and the remaining to be used for hotel purposes."
"Resolved further that the space permitted for Commercial/incidental to hotel use be not an independent block but be merged with incidental to hotel activity."
14. Plaintiff was not aware of the said resolution which was communicated to the plaintiff on 17.09.1980. It was also mentioned in that letter that there should Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 5/45 be one block and not two independent blocks as originally envisaged. The DDA vide order dated 27.09.1980 asked the plaintiff to furnish the revised building plans in accordance with the directions contained in letter dated 17.09.1980.
15. This was also an illegal act on the part of the defendant and plaintiff invoked the writ jurisdiction of Hon'ble High Court of Delhi. It was allowed in favour of the plaintiff and the order of Delhi Development Authority dated 17.09.1980 passed on the resolution dated 11.08.1980 was quashed and Delhi Development Authority was directed to approve the drawing if the same were in accordance with the undertaking dated 29.11.1977. Delhi Development Authority preferred LPA against the judgment and plaintiff also filed the cross LPA praying that the guidelines dated 08.06.1978 be also quashed and both the appeals was disposed off vide order dated 29.04.1983 passed by the Division Bench dismissing the appeal of DDA and allowing the cross appeal of plaintiff.
16. It was held by the Division Bench
(i) On the plot in question the petitioner was obliged to construct a hotel building in which there was to be a hotel about 400 beds in which building the remaining area could be used for purposes incidental to the hotel and also as ordinary commercial area e.g. commercial offices.
(ii) The lease dated 30.11.1977 could not be varied by the DDA in exercise of its executive power.
(iii) The petitioner's rights under the Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 6/45 lease could not be encroached upon or in roads made by the DDA as it had no statutory or other authority to do so.
(iv) Resolution no. 106 was ultra vires, arbitrary and violative of the petitioner's rights under Articles 14 of the Constitution and was liable to be quashed.
(v) The rejection of the plans by the DDA was without any valid basis.
(vi) There was no valid or subsisting order or direction of the Government of India under section 41 of the Act which prohibits the DDA from passing the building plans of the petitioner.
(vii) The DDA has no authority to restrict the ordinary commercial user of the building area as long as the petitioner uses the said area for any one or more of the commercial purposes specified in clause 14 of the lease subject to the undertaking dated 29.11.1977 read with the agreement of 08.07.1980 which provided that the hotel building must have a hotel in which there has to be a hotel of at least 400 beds.
17. Plaintiff submitted a detailed representation of the DDA showing that no delay has been caused by the plaintiff and in fact the plaintiff was incurring heavy loss due to the delay caused by the defendant and also requested to consider the Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 7/45 plan already filed before DDA and to approve them.
18. Despite orders of the Hon'ble High Court of Delhi dated 29.04.1983 the plan was sanctioned by Delhi Development Authority only on 15.12.1983 and within less than three weeks of the said sanctioned, construction was started by the plaintiff and intimation in this regard was sent to Delhi Development Authority. Thereafter, DDA issued a notice dated October 29,1983 to the plaintiff claiming Rs.10,05,684.93 as alleged arrears of ground rent at the enhanced rate. Plaintiff made representation to DDA who refused to consider it and the plaintiff filed a suit in 1984 restraining the DDA for levying such penalty.
19. The Single Judge granted exparte temporary injunction but lateron vacated it and allowed the application of DDA under section 34 of the Arbitration Act, 1940. Plaintiff filed an appeal against the refusal of confirmation of the exparte injunction and the injunction was granted by the Division Bench on 15.04.1986 after hearing both the sides restrained the DDA for levying, claiming and demanding or recovering by themselves or through their agents a sum of Rs. 10,05,684.93 or any other amount on account of ground rent in respect of the plot in question.
20. Since the plot were sanctioned on 15.12.1983, the plaintiff in order to raise the funds from financial institutions sought permission as mentioned in the terms and conditions of the registered perpetual lease deed. Vide its letter dated 24.02.1984, plaintiff intimated DDA to raise about Rs.25 crores as constructions work has been started from 01.01.1984. As the earlier mortgaged permission was utilized and loan has been fully paid to that bank. But the same was rejected on the ground that permission was already granted.
Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 8/45
21. After a long correspondence by the plaintiff with different authorities, the unconditional mortgage permission was granted finally on 18.08.87.
22. In the meantime on 16.04.1985, in order to improve the internal planning of the hotel and to bring it up to the international standard of five star deluxe hotels, the plaintiff got its revised plan prepared and submitted the same to DDA alongwith the requisite fee of Rs. 16,724/. The DUAC approved the said plans on 25.09.1985.
23. In the meantime, on 17.10.1985, the Govt. of India has issued an order stopping construction of multistory building in New Delhi with immediate effect. DUAC wrote to the Central Government on 04.11.1985 that despite their previous clearance they were not issuing the final letter of approval of the plaintiff 's revised plans and sought instructions as the same was being withheld only because of the said ban. Vide order letter 16.12.1985, defendant informed the plaintiff not to undertake construction of other blocks i.e. hotel blocks unless plans are sanctioned finally. DDA finally issued the requisite sanction of the revised plans of the hotel complex on April 28, 1988.
24. In accordance with the revised plan the plaintiff constructed Blocks E and F which were complete in all respect and it is stated that about Rs. 20 crores were incurred on the said construction. 'E' Block comprises of 20 storeyed building while 'F' Block has 8 storeyed building and both are commercial buildings and admittedly have been constructed in accordance with the sanctioned plans. The plaintiff has pleaded that the delay in constructing the buildings in the plot in question has occurred due to various illegal acts of the DDA which the plaintiff had to challenge from time to time and as soon as the final approval was given, the plaintiff was able to construct these two blocks within about a year. The Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 9/45 plaintiff has pleaded that a load of 4000 KVA was sanctioned by Delhi Electric Supply Undertaking (for short 'DESU'), defendant no. 3, exclusively for the said commercial blocks and the plaintiff had constructed separate electric sub stations in that respect and had installed the machinery for air conditioning incurring cost of about rupees one crore and has incurred about Rs. 50,000/ in providing and fixing seven transformers and has paid about Rs. 4,00,000/ to the DESU for the installation of electric sub stations for providing electricity to the said two blocks. It is mentioned that the substations have been connected to the Nehru Place Grid of the DESU and only meters remained to be installed.
25. The plaintiff has further pleaded that drainage work in the said two blocks has been completed in all respects and an application had been given for grant of certificate in form 'C' which was granted on July 14,1988. It is also pleaded that the certificate on prescribed form 'D' about the sanitary and water works has been granted by the DDA on July 28, 1988. The plaintiff has further pleaded that the DDA had issued some new guidelines dated July 21, 1988, for calculating and levying penalties for delayed construction of different types of buildings at much higher rates than were prevalent on the basis of the earlier guidelines. The higher penalties were imposed in the new guidelines at very high rates in respect of the building which are to constructed within 10 years from the date of delivery of possession.
26. The plaintiff moved a formal application for the grant of occupancy certificate and no objection for permanent electric connections in respect of the said two blocks to the DDA on January 23, 1989. The plaintiff has then mentioned about his having entered into an agreement with M/s Indian Petrochemical Corporation Limited for leasing out 10th floor of Block 'E' as the plaintiff was expecting that the necessary occupancy certificate and electric meters would be Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 10/45 installed within on month and the plaintiff had also entered into agreement for sale of different units of space in the said two blocks with about 200 persons and a sum of Rs. 4 crores is yet to be received from the said persons on giving possession to them on the basis of the agreements already arrived at. Then, details of the agreement so arrived at in respect of some important organisations and persons have been indicated in the plaint. It is pleaded by the plaintiff that having heard nothing from the DDA for about four months, a detailed representation dated May 25, 1989, was given to the Chairman of the DDA and in the meanwhile on June 1,19889, the Chief Fire Officer granted a requisite certificate certifying that the said two blocks were fit for occupation from the fire safety point of view. It is mentioned in the plaint itself that the Joint Director (Building) of the DDA has given his note that the blocks in question are independent functional units for which C & D forms had already been issued and he sought the order from the Commissioner (Land) for issuance of the completion certificate but the Commissioner (Land) raised frivolous queries to find out about previous practice in the matter.
27. The plaintiff had received certificates from the Mahanagar Telephone Nigam dated June 19,1989, giving no objection to the grant of occupancy certificate which was also forwarded to the DDA on June 20,1989.
28. The plaintiff thereafter submitted a detailed representation on July1, 1989, for getting the occupancy certificate issued expeditiously as all formalities had been completed.
29. The plaintiff has stated that it appears that certain elements in the DDA were having some bias against the plaintiff and took up a deliberate defiant attitude and those were the elements which were substantially responsible for Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 11/45 causing so much delay in sanctioning the building plans.
30. The DDA vide its order dated July 20,1989, declined to give the completion certificate on the prescribed form taking the plea that the plot is meant for hotel use for which the plaintiff has also got the building plans sanctioned and no part of the hotel block has yet been completed at all and as such part occupancy for commercial blocks can not be considered. Plaintiff made a representation to the Vice Chairman and Chairman of the DDA on July 25,1989. A similar detailed representation was given on July 28,1989, to the Chairman of the DDA. It is mentioned that on August 16, 1989, a meeting took place with the Lt. Governor, Secretary, the Commissioner (Land), the Director (Commercial) and Joint Director (Building) and the plaintiff's Director and it was decided in the meeting that a practical view of the situation should be taken as it would be unrealistic to withhold the occupancy certificate of already completed blocks.
31. The plaintiff claims to have submitted a fresh self contained application dated August 25,1989, for the purposes of depositing the requisite fee. It was pointed out by the plaintiff that there is an error in the noting of the DDA that the building plans have been sanctioned only for hotel, rather E & F blocks were, in fact, sanctioned for commercial use independent of the hotel. It is mentioned that DDA raised certain more objections dated August, 29, 1989, for realising composition fee for belated construction amounting to Rs. 25,91,800/ before any occupancy certificate was granted. The plaintiff has pleaded that delay in construction of the building has occurred, as mentioned above, not on account of any fault of the plaintiff and thus, no such penalties were leviable for any delayed construction and even otherwise for issuance of occupancy certificate the question of levying of penalties on the basis of the terms of the lease deed was completely foreign.
Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 12/45
32. The plaintiff has given reference to the notings appear to have been given by different officers in the files of the DDA and then has referred to order dated November 10,1989, passed by the Lt. Governor by which he directed that "No Objection Certificate" for regular power connection and partial occupancy certificate may be given and he also mentioned that in practice partial occupancy certificates have been issued and it would be a waste of scarce national resources to keep such costly assets idle. It was also noted by the Lt. Governor that the ground of rejection of the plans by the DDA that commercial construction can not be permitted is against the order of the High Court in pursuance to which the pans were sanction in 1983. He also referred to the delay caused by the DDA in granting mortgage permission and sanctioning the revised plans which was a delay of about four years and it would not be correct to levy penalty for delay in construction for the period for which the DDA delayed sanction of building plans from 1977 to 1983 and this period should be excluded from the computation of the time taken in construction for purpose of levy of penalty and further period from 1985 to 1988 during which the clearance of the revised building plans was held up may also be excluded. He also ordered that the penalty for delayed construction may be calculated accordingly after excluding those periods and whatever penalty is due may be charged in respect of the portion that is ready for use and there should be no delay in doing this. He also ordered that he would like to observe from the tenor of some of the notings of the DDA that there exist prejudice against the plaintiff because the plaintiff succeeded in court against the DDA in getting the plaintiff's claim for commercial portion through. He directed that once the decision had been accepted and implemented, future examination of other issues should not be clouded by this and they must be objective and not take such matters personally.
Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 13/45
33. Despite this order, it appears that a note was put up again to Lt. Governor in which another sum of Rs. 87,39,792/ was proposed as additional penalty. The Lt. Governor passed another order on December 11, 1989, clarifying the principal underlying his previous order that it would not be fair to penalise the party and to levy the penalty for delayed construction if the responsibilities for the delay was of the DDA and he directed that such period should be excluded from computation of penalty. He also clarified that the question of additional penalty would arise only for the period subsequent to the expiry of 10 clear years after excluding the period for which the DDA had been responsible for the delay.
34. The Vice Chairman of the DDA constituted a committee and the plaintiff submitted his representation dated January 4,1990, and in the meanwhile a new Lt. Governor assumed office on December 26,1989. A representation was made to him. The committee on January 23, 1990, recommended that delay from January 24, 1977, to January 19,1981, was attributable to the DDA and the period upto December 15,1983, should not be excluded as the plaintiff had gone to Court and not the DDA though the plans were sanctioned only after the final order of the High court. It also opined that delay of 31/2 years from February 24,1984 to August 18,1987, caused by the DDA in giving mortgage permission can not be considered to be a factor for which the plaintiff can legitimately claim exemption for computing the period for delayed construction. It also opined that according to the guidelines the construction already completed on the plot will be considered as substantial if one third portion of the permissible ground floor coverage is constructed and form D is obtained.
35. The plaintiff has pleaded that the Committee erred in not excluding the period from 1977 to 1983 which was the delay caused only due to the lapse of the DDA is not sanctioning the plans and the plaintiff was forced to take resort to the Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 14/45 legal proceedings and the plaintiff was successful in the legal proceedings and thus, the building plans were sanctioned only in accordance with the order of the High court and the plaintiff was not responsible for such delay.
36. Plaintiff gave representation to the Lt. Government on December 26, 1989 and February 2,1990, highlighting that maximum penalty imposable would not exceed Rs. 39.101/ and as a matter of fact, no question of imposition of any penalty would arise if the reasonable period of construction was taken to be five years as suggested by the Lt. Governor in his order dated November 10, 1989. It is the case of the plaintiff that the Lt. Governor passed his final order on February 2, 1990, directing that the "No Objection Certificate" for permanent power connection and occupancy certificate for the building which is ready should be given to the plaintiff against which the plaintiff had spent a large amount of money on the completed buildings for the construction of which the plaintiff had taken a number of loans and is unable to meet the loan commitment without earning anything from the investment on the project. He further directed that the question of the DDA's claim for penalties for the alleged delay in the construction should be delinked from the matter of grant of "No Objection Certificate" and those questions may be examined separately and the result of examination be put up to him.
37. Plaintiff, however, was not handed over these documents and he made representation to the Lt. Governor on February 23, 1990. The plaintiff had stated that it was incurring loss of about Rs. 65,00,000/.
38. Then, the plaintiff has mentioned about the role of the DESU is not sanctioning the electric connections till occupancy certificate is furnished while other formalities having been already completed. The plaintiff has then Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 15/45 enumerated his legal grounds on which the plaintiff has become entitled to have issued the occupancy certificate by the DDA and for getting the electric connection from the DESU in respect of the aforesaid two blocks. The plaintiff has mentioned that a civil writ petition no. 856/90 was filed for getting writs issued against the DDA and the DESU for the same reliefs as are now prayed in this suit. The writ petition, after show cause notice and reply, was withdrawn and the court granted the liberty to institute other legal proceedings for the redressal of the plaintiff's grievances and thus, suit was instituted.
39. It is mentioned that the DDA had issued a notice dated March 29, 1990, claiming Rs. 1,05,59,582/ as the penalty amount for the delayed construction being made on the plot mentioning that the construction should have been completed by October 20,1979, within three years of the delivery of possession of the plot and no extension can be granted beyond October 20, 1990, and for granting such extension the said computation fee must be paid.
40. A suit was filed challenging the above demand vide notices dated 29.03.1990 which is also pending for adjudication alongwith present suit alongwith earlier suit.
41. Alongwith the suit, the plaintiff also moved three interim applications seeking directions against the defendant to hand over the part occupancy certificate of block E and F prepared on 07.02.1990 by the Director of the defendant, seeking restraint order against the defendant from enforcing the recovery of Rs.1,05,59,582/ and for seeking stay of the notice of demand and also seeking injunction against DESU for energizing the permanent connection already lying sanctioned. These applications were registered as IA no. 4735, 4736 and 4737/90.
Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 16/45
42. That after hearing the parties at length the learned Single Judge of this Court Mr. Justice P.K.Bahri vide order dated 21.12.1990 was pleased to direct the defendant to hand over the part occupancy certificate subject to deposit to Rs. 5 lacs with the defendant against the said demand of Rs. 1Crore and odd. DESU was directed to energise the connection upon production of part occupancy certificate.
43. Against the said order of the Single Judge of this court, both defendant ad DESU preferred appeals (FAO (OS) 5/91 and FAO (OS) 28/91 before the DB of this court which were dismissed by the DB vide order dated 29.01.1993 wherein the order of the Single Judge was upheld.
44. That the defendant thereafter filed an SLP to the Supreme Court against the said decision of the DB but the SLP was dismissed by the Supreme Court vide order dated 14.05.1993.
45. That it was only after the dismissal of the SLP filed by defendant that the defendant delivered the part occupancy certificate on 10.06.1993. It was only after the grant of part occupancy certificate the plaintiff could utilize the building and after a long drawn litigation with DESU the connection was energised by DESU in 1995.
46. In the meanwhile the construction of hotel was in full swing was completed in all respects by the plaintiff by 01.02.1994 as by then Forms C and D in respect of Hotel block had been granted to the plaintiff on 25.01.1994 and 01.02.1994 respectively by the MCD. It would be pertinent to note that the date of grant of Form D is always considered to be the date of completion of the building.
Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 17/45
47. That it is submitted that before the hotel block could be completed the building activities which were under the jurisdiction of DDA were transferred to MCD as a result of which after the completion of the hotel block the plaintiff had to apply for the occupancy certificate of the complete complex i.e. hotel block with the MCD. Initially, the plaintiff had applied for the grant of permission to run the hotel and provisional occupancy certificate with the MCD as has been done by various other hotels as it takes time for granting the permanent completion certificate. Since that was not allowed by the MCD the plaintiff ultimately applied on 15.11.1994 for the grant of permanent occupancy certificate with MCD complying with all the formalities, but here also, after a long drawn battle with MCD at various stages and finally through the courts the completion certificate has been ultimately granted and delivered to the plaintiff only on 20.11.96 but DDA issued a notice dated 21. 03.96 demanding composite fee of Rs.75,14,943/, hence this suit wherein, it is prayed that
48. In the present suit, plaintiff has prayed that
(a) pass a decree of declaration declaring that no amount of composition fee or non construction penalty is leviable upon the plaintiff for completion of the blocks of the hotel cum commercial block of Nehru Place and that the demand as raised vide letter dated 21.03.1996 for Rs.75,14,943/ on account of non construction penalty for the period 21.10.1990 to 31.12.1994 is illegal, void, unjust, improper, ultravirus and without jurisdiction of no effect and is not binding on the plaintiff.
(b) pass a decree of permanent injunction in favour of plaintiff and against the defendant for restraining the defendant from enforcing the demand of Rs. 75,14,943/ as raised vide letter no. F.12 (8)/76/Impl/C.L./1489 dated 21.3.96 on account of non construction penalty for the period 21.10.90 to 31.12.94 and Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 18/45 also repeated by the defendant vide letter dated 25.10.1996 and 18.12.96. The defendant be also restrained from taking any action for determination/cancellation of the lease on account of non payment of the amount demanded towards non construction penalty.
(c) a decree of mandatory injunction may also be passed in favour of the plaintiff and against the defendant thereby directing the defendant to forthwith issue a 'no dues certificate' to the plaintiff in respect of the hotel cum commercial complex at Nehru Place, New Delhi without imposing any condition of any natural whatsoever.
Written Statement
49. Written statement was filed by the defendant wherein the factum of purchasing the suit property in auction by the plaintiff and payment of money as well as handing of possession of the said plot to the plaintiff has not been disputed by the defendant.
50. It is stated that the auction was made in relation to a single plot and was not of land as distinguished from the pot. The said plot was not open for any further bifurcation or sub division and a composite building plan was required to be furnished for the single plot.
51. It is stated that the plot was advertised only as a hotel plot and sold only as a hotel plot. The Architectural Control Rules for the said plot referred to it only as a hotel plot. However, on account of an error at the time of execution of the lease deed, the plaintiff could claim an advantage of seeking construction of Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 19/45 commercial space in addition to the hotel premises.
52. DDA issued a 'No Objection Certificate' on 22.11.1976 to the plaintiff for submitting of building plan and the plaintiff furnished the preliminary drawings in 1977. But the application for building permit alongwith the requisite building plan fee and the final plans were submitted by the plaintiff on 16.02.1979. It was rejected on 31.01.1979 on the ground that the floor area proposed to be used for the commercial use as more than the permissible limit of 25% of FAR to be used for commercial purpose and it was requested by the DDA to submit fresh plan conforming to the purpose for which the plot has been allotted i.e. a hotel.
53. After several meetings and discussions on 07.11.1979, plaintiff furnished revised plans under protest. Thereafter, Central Government directed DDA to submit the records in relation to the suit property to the Ministry. DDA intimated the plaintiff that they were not to undertake any construction activity on the plot without obtaining the prior approval for the same. After several discussions, on 11.08.1980, DDA by resolution resolved that maximum 17% of the total floor space built up was to be permitted as commercial and incidental to hotel of the remaining area to be used for hotel purposes. It was also resolved that the space permitted for commercial was incidental to hotel used and it should not be an independent block. This resolution was communicated to the plaintiff on 17.09.1980 and the plaintiff was asked to furnish revised building plans. The same was challenged by the plaintiff by way of writ petition wherein the resolution dated 11.08.1980 was quashed by Hon'ble High Court.
54. DDA filed an appeal and plaintiff was also filed a cross appeal. DDA was asked by the Central Government not to file any appeal against the order of Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 20/45 Division Bench. The plan for the entire project were finally sanctioned on 15.12.1983 and in terms of condition no. 6 of the sanction of the plans by the DDA, the plaintiff were required not to occupy or permit occupation of the building or the use or permission of use of the building or any part thereof until occupancy certificate was issued by the DDA.
55. The plaintiff started construction in 1st week of January, 1984 and there were no impediment from the DDA side. The plaintiff on their own submitted a revised plan on 16.04.1985 which were forwarded to DUAC by DDA on 17.05.1985 which could not be approved because the land scape plan was not submitted by the plaintiff and the said land scape was submitted by the Architect of the plaintiff on October 22, 1985.
56. In the meantime, while instructions was issued by the Ministry of Urban Development on October 17,1985 regarding a ban on multi stored building in New and South Delhi. In view of the instructions , DUAC could not issue approval of the plaintiff and the revised plan was finally approved on 28.04.1988, after the ban was lifted by the Central Government on 06.01.1988. It is alleged that the plaintiff had incorrectly stated that the DDA wasted more than three years and four months in approving the revised building plans.
57. It is also stated that there were no ban on the directions by the Central Government which had already commenced and there would have been no difficulty, if the plaintiff would have continue to construct in accordance with the original sanction on 15.12.1983. It is also stated that the plaintiff had wrongly alleged the delay in construction on account of delay on the part of DDA in granting them necessary permission for mortgage. It is further stated that the hotel was in the arrears on ground rent upto 20.10.1979 and thereafter @ 2½ % per Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 21/45 annum alongwith interest accrued thereon to the extent of Rs. 17.5 lacs as calculated upto 20.10.1986 in addition to composition fee amounting of Rs. 4,65,378.50/ upto 20.10.1985 for belated construction was also required to be paid. The total amount of Rs. 22,15,381/ was to be paid. This was communicated to the plaintiff but it did not agree to the terms. The representation filed by the plaintiff in this regard were rejected and it was ordered that in the event that there is a default on the part of the plaintiff in the eventuality of winning the litigation , the DDA would not give the completion/occupancy certificate till such time. The dues will be cleared by the party. The DDA was well within its rights to insist for the bank guarantee of the requisite amount before the issue of completion/occupancy certificate.
58. It is further stated that the certificate under form C and form D are not sufficient in law for giving an occupancy certificate as per bye laws. Though, DDA had sanctioned the building plan in relation to the composite complex both in the year 1983 and had revised in the year 1988. The building permit of year 1983 covered the entire project. In terms of building bye laws occupancy /completion certificate can be granted by DDA to a person on completion of the construction in accordance with the building permit. In the event, a party wishes to seek a completion/occupancy certificate in relation to a partly constructed project, DDA can grant such permission and provide completion/occupancy certificate by deleting the incomplete portion and for which the party will not be allowed to raise construction any further. It is impermissible for the DDA to allow more than one occupancy certificate in relation to one building permit as is clear from bye laws 7.5.1. and 7.5.2
59. It is further stated that plaintiff through various communications, requested the DDA to furnish completion certificate in relation to block E and F Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 22/45 and not in terms of bye laws and not in response to his various letters, DDA wrote to plaintiff on April 6,1989 requiring the plaintiff to furnish various documents and also to clarify for not taking up the construction of the hotel block simultaneously. No satisfactory explanation has been provided by the plaintiff as to why the hotel block was not constructed simultaneously. After considering all the documents DDA communicated to the plaintiff on 19.07.1989 and 20.07.1989 "that this plot is meant for a hotel for which he got the building plan sanctioned. No part of the hotel block has yet been completed at site. As such , part occupancy certificate for commercial block can not be considered".
60. It is also alleged that no notice under section 53B(3)of the Delhi Development Act 1957 was served upon DDA and therefore, the present suit is barred for the reason above.
61. It is also stated that the plaint does not disclose any cause of action and is liable to be rejected on this very ground. It is further argued that plaintiff had made material and fraudulent concealment in the present suit and it had stated in the plaint that it had withdrawn Civil Writ Petition number 856/1990 on account of technical reasons. This fact has been stated falsely by the plaintiff as during the course of of hearing of the said writ petition , the letter of plaintiff dated 23.01.1989 to the defendant no. 1 was not a notice of completion in terms of bye laws 7.5.2. And the plaintiff during the course of hearing produced form F and G dated 11.04.1989 which the plaintiff claimed was a notice of completion filed on that day and DDA had filed an affidavit denying this documents to have ever been submitted to DDA. The plaintiff has not made any valid application for grant of occupancy certificate and is not entitled to such relief.
62. It is further stated that the plaintiff is obliged to make payment with Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 23/45 respect of composition fees and penalties arising out of the lease deed between the parties and the defendant are not liable to be restrained from seeking to recover their legitimate dues from the plaintiff. It is stated that the suit of the plaintiff is liable to be dismissed.
Replication
63. Replication to the WS filed by plaintiff where he reiterated the facts mentioned in the plaint and denied the averments made by the defendant his written statement.
Issues
64. After completion of pleadings, issues were framed vide order dated 20.02.2006 which are as under :
(i) Whether the plaint has been signed, verified and instituted by a duly instituted person? OPP
(ii) Whether the present suit is liable to be dismissed on account of non joinder and /or misjoinder of necessary parties? OPD
(iii) Whether the plaint is without any cause of action and is liable to be rejected under Order VII Rule 11 (d) of the CPC? OPD
(iv) Whether the suit is liable to be dismissed for want of a proper statutory notice u/s 53B of the Delhi Development Act, 1957? OPD.
(v) Whether the delay in completion of the building can be attributed to the plaintiff? If so, its effect.
(vi) Whether any penalty for the delay can be levied by the defendant upon the plaintiff? If so, to what extent?
(vii) Whether the plaintiff is entitled for the decree of permanent injunction Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 24/45 as prayed for.
(viii) Whether the plaint is barred by time? OPD.
(ix) Relief.
Plaintiff's Evidence
65. After framing of issues, matter was listed for evidence. During plaintiff's evidence, PW1 Vijay Singh, PresidentCorporate Affairs of Nehru Place Hotels Limited come in the witness box on 22.02.2008 to depose on behalf of plaintiff. In the evidence, he had relied upon certified copy of resolution which is Ex. PW1/1 (colly). PW1 was not cross examined. Opportunity to cross examine the witness i.e. PW1 was closed on 01.09.2010 and PE was closed on 17.02.2011. However, vide order dated 11.04.2013 of Hon'ble High Court has observed that (1) This order is in continuation of the earlier order dated 09.04.2013.
(2) The counsel for the plaintiff/non appellant states that the witness who was examined is no more in the employment of the plaintiff/non appellant.
(3) It is however agreed that non cross examination by the appellant/DDA of the said witness would not be treated as admission by the appellant/DDA of the testimony of the said witness if the appellant /DDA in its own evidence is able to establish the facts otherwise.
(4) On the aforesaid consent terms the two
Chamber Appeals and the applications therein are
disposed of, modifying the impugned order in terms of
Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 25/45
this consent order".
Defendant Evidence
66. After concluding of plaintiffs evidence, matter was listed for defendant's evidence. During defendant's evidence, defendant/DDA examined DW1 Sada Shiv, Deputy Director, Commercial Lands, Delhi Development Authority who had relied upon documents i.e.
(a) Order dated 23.05.1990 passed in CW 856/90 is Ex. D1W1/1
(b) Perpetual Lease is Ex. D1W1/5
(c) Architectural Condition for disposal for hotel plot is Ex. D1W1/6.
(d) Letter dated 14.03.1978 is Ex. D1W1/7.
(e) Proforma to be filled by the Architect of the project Under Bye Laws 7.6.2. is Ex. D1W1/8.
(f) Letter dated 21.05.1979 is Ex, D1W1/9.
(g) Operating part of judgment is Ex, D1W1/12.
(h) Letter dated 15.12.1983 is Ex D1W1/13.
(i) Rough Sketch plan is Ex. D1W1/14.
(j) Letter dated 04.11.1985 is Ex D1W1/15.
(k) Letter dated 06.01.1988 is Ex. D1W1/18.
(l) Sanction letter dated 28.04.1988 is Ex, D1W1/19.
(m) Certificate dated 03.08.1989 is Ex. D1W1/20.
(n) Occupancy certificate dated 19.07.1989 and 20.07.1989 is Ex, D1W1/21.
(o) Policy Guidelines in respect of levy of composition charges dated 21.07.1988 is Ex. D1W1/22.
(p) Policy Guidelines in respect of levy of composition charges dated 16.01.1989 is Ex. D1W1/23.
Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 26/45
(q) Letter dated 06.04.1989 is Ex. D1W1/25.
(r) Letter dated 29.03.1990 is Ex. D1W1/46.
DW1 was cross examined by the Ld. counsel for plaintiff.
67. I have heard arguments on behalf of both the sides and perused the record carefully. Since both the cases have been filed challenging the levy of penalties/composition fees imposed upon the plaintiff in respect of the suit property in question for different period, and issues framed in both the suits are also same, therefore, the issues of both the cases shall be decided by way of common findings.
(i) Whether the plaint has been signed, verified and instituted by a duly instituted person? OPP
68. The onus to prove this issue was upon the plaintiff. Ld. Senior Advocate for plaintiff has argued that the plaint has been filed by Ranvijay Singh who is duly authorised to file the same in view of the board resolution which has been proved on record. Ld. Counsel for defendant has rebutted the arguments stating that plaint has not been signed and verified properly.
69. Plaintiff PW1 Vijay Singh has placed on record the copy of board resolution dated 07.06.1991 in both the suits alongwith a letter of authority authorizing PW1 to sign, verify and institute the present suit. Witness has not been cross examined on this point. No cross examination has been done on behalf of defendant to challenge authority of PW1 to file the present case, therefore, this issue is decided in favour of plaintiff in both the cases.
Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 27/45
(ii) Whether the present suit is liable to be dismissed on account of non joinder and /or misjoinder of necessary parties? OPD
70. The onus to prove this issue was upon the defendant. Ld. Counsel for the defendant has argued that MCD was a necessary party and has not been made party in both the suits. However, Ld. Senior Advocate for plaintiff submitted that in the first suit, MCD was already made a party during the pendency of the case however no relief has been claimed against MCD by the plaintiff in both the suits therefore, MCD is not a necessary party.
71. Defendant has not led any evidence in support of this issue. In written statement, it was stated that MCD has not been made a party whereas this area had gone under MCD. Except for raising this contention, nothing has been brought on record to prove the same. In earlier suit, MCD was made a party during the course of trial and issues have been framed thereafter. Therefore, this issue does not arise in the earlier suit, . However in second case, MCD has not been made a party. It is not in dispute that it is the defendant/DDA who had issued the impugned demand notices dated 29.03.1990 and 21.03.1996 demanding Rs.1,05,59,582/ and Rs.75,14,943/respectively. MCD has not issued the impugned notices and no relief has been claimed by the plaintiff herein against MCD and to the absence or presence of MCD as a party in this suit does not affect the adjudication of any issue in this case, therefore, the MCD is not a necessary party and the suit can not be dismissed on account of non joinder and misjoinder of necessary party. This issue is decided in favour of plaintiff and against the defendant.
(iii) Whether the plaint is without any cause of action and is liable to be rejected under Order VII Rule 11 (d) of the CPC? OPD Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 28/45
72. The onus to prove this issue was upon the defendant. Ld. Counsel for the defendant has argued that the plaint does not disclose any cause of action and is liable to be rejected however, Ld. Senior Advocate for the plaintiff has pointed out that the application Under Order VII Rule 11 CPC was moved by the defendant which was dismissed vide order dated 21.12.1990.
73. It is important to discuss the meaning of "cause of action' in order to deal with the arguments of the parties.
A cause of action is a bundle of facts which are required to be proved for obtaining relief and for the said purpose, the material facts are required to be stated but not the evidence except in certain cases where the pleadings relied on are in regard to misrepresentation, fraud, willful default, undue influence or of the same nature. So long as the plaint discloses some cause of action which requires determination by the court, mere fact that in the opinion of the Judge the plaintiff may not succeed can not be a ground for rejection of the plaint;
Mayar (H.K) Ltd V. Owners & Parties, Vessel M.V. Fortune Express, AIR 2006 SC 1828.
74. Plaintiff in both the cases has set out the facts showing that how it has right to sue the defendant in order to get impugned notices quashed and to restrain the defendant from levying penalties upon it and therefore, it can not be said that the plaint does not disclose any cause of action and is liable to be rejected Under Order 7 Rule 11 (d) CPC. This issue is also decided in favour of plaintiff and Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 29/45 against the defendant.
(iv) Whether the suit is liable to be dismissed for want of a proper statutory notice u/s 53B of the Delhi Development Act, 1957? OPD.
75. The onus to prove this issue was upon the defendant. Ld. Counsel for defendant has argued that statutory notice required u/s 53B of the Delhi Development Act, 1957 of DDA was not served upon the DDA before filing of the present suit and therefore, the suit is liable to be dismissed on this count alone. However, Ld. Senior Advocate for the plaintiff has argued that he had filed the suit for permanent injunction restraining the defendant from recovering the penalty amount. He has argued that there was imminent danger of determination of lease by the DDA in case of non payment of the amount mentioned in the demand notices and therefore there was no requirement of serving notice under section 53 B of the Delhi Development Act, 1957.
76. No evidence has been led in this regard by the defendant. In the earlier suit, Order dated 29.12.1990 passed by the Hon'ble High Court while disposing of the interim application for plaintiff as well as application Under Order 7 Rule 11 CPC has dealt with this contention of the defendant extensively and has observed that before filing of the first suit, the plaintiff had filed a civil writ petition before the High Court. It was lateron withdrawn and it was a sufficient notice u/s 53B of the Delhi Development Act, 1957. Even otherwise, the plaintiff has sought relief of permanent injunction in view of the notices sent by the DDA threatening the plaintiff to pay the penalty amount within the stipulated period failing which the lease shall be determined. The issuance of notices/letters containing this very fact was a sufficient apprehension to be created in the mind of plaintiff and in that Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 30/45 case, if the notice u/s 53 (B) of Delhi Development Act, 1957 would have been given prior to the filing of the suit, the whole purpose of the filing of the suit would have been frustrated. This is squarely covered u/s 53B (3) of Delhi Development Act, 1957. The very purpose of serving of this notice is to make the Government Authorities aware that a claim is being sought against them however, in the present case, there was long drawn litigation between the plaintiff and the defendant and the plaintiff very well know that the defendant was not going to accept any of the claims of the plaintiff and they were not at settlement terms and therefore, the need of giving notice did not arise. Hence, there was requirement to giving any notice 53 (B) of Delhi Development Act, 1957. The procedure are hand maids of justice and they can not be allowed to gain priority and to defeat the ends of justice. Therefore, the suit can not be said to be bad for the want of proper statutory notice.
77. In the second suit, after receiving the impugned order of demand notice dated 21.03.1996 by plaintiff from DDA, a reply was given by the plaintiff on 25.05.1996 and therefore, it was very clear that the plaintiff was not ready to pay the penalty. This fact is not disputed by the defendant as the plaintiff's witness/PW1 has not been cross examined by the defendant. This reply dated 25.05.1996 can be very well taken/considered to be a valid notice u/s 53 (B)of Delhi Development Act, 1957 before filing of the second suit. This issue is also decided against the defendant and in favour of plaintiff.
(viii) Whether the plaint is barred by time? OPD.
78. Ld. Counsel for defendant has argued that the suit is barred by time as in the first suit the notice pertains to period i.e. from 29.03.1990 and 21.03.1996 and Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 31/45 therefore, the suit has been filed at the belated stage and is liable to be dismissed. Ld. Senior Advocate for the plaintiff submits that suit has been filed immediately after receiving the impugned notice and therefore the suit is well within the period of limitation.
79. In the relief clause of both the plaints, the plaintiff has sought a relief of declaration declaring the impugned notices dated 29.03.1990 and 21.03.1996 as null and void. The first suit was filed in May 1990 and second suit was filed on 01.01.1997. The impugned notices are of 1990 and 1996. In order to file a suit for declaration, the limitation is three years. The right to sue accrued on receiving the impugned notices. The suit has been filed before the expiry of one year from that a date of issuance of impugned notices therefore, this suit can not be said to be barred in time. This issue is also decided against the defendant and in favour of plaintiff.
(v) Whether the delay in completion of the building can be attributed to the plaintiff? If so, its effect.
(vi) Whether any penalty for the delay can be levied by the defendant upon the plaintiff? If so, to what extent?
80. Both the issues being interrelated are taken up together.
81. Ld. Senior Advocate for the plaintiff has argued that the delay in completion of the building can not be attributed on the plaintiff as it was the defendant who time and again had been causing the delay in granting sanctions or passing illegal and arbitrary resolutions from time to time as already mentioned in the plaint and which forms the part of affidavit of PW1 which has remained un Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 32/45 rebutted and uncontroverted. Ld. Senior Advocate for the plaintiff has further argued that in view of the guidelines dated 21.07.1988, the construction of block E and F was completed and form D was obtained on 28.07.1988 which was more than 53% of entire floor area covered. He has submitted that plan were sanctioned on 15.12.1983 and delay was caused in between in granting permission for mortgage. He has further argued that further delay was caused in approving the revised plan submitted by the plaintiff for the hotel blocks. He has further argued that the ban on constructions of building was also raised in October 1985 and he could not raise construction and therefore, these periods are to be excluded and after exclusion of this periods, the construction of the substantial area was done by 28.07.1988 and therefore, no composition fees can be levied by the plaintiff for entire blocks in both the suits and therefore, impugned notices dated 29.03.1990 and 21.03.1996 be declared null and void being arbitrary and without any basis.
82. On the other hand, Ld. Counsel for the defendant has argued that delay has been caused by the plaintiff time and again. She further argued that the auction was made in the year 1976 primarily for the building of hotel for the purpose of using it in ASIAD 1982, however, the lease deed inadvertently contained a mistake and instead of hotel, the word commercial was written. Ld. Counsel has further contended that it was known to the plaintiff that the lease deed was executed predominantly for the purpose of construction of the hotel and commercial place was to be constructed within the hotel itself. It is argued that the commercial space could not have been constructed independent on the hotel block. It is further argued that in April 1985, plaintiff had filed revised plans for the hotel without land scaping plan which caused delay in giving approval. It was further argued that as regards the ban of the Central Government on construction of multistorey building, the same was with respect to new construction and not with respect to the old construction which had already started. It is also argued Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 33/45 that form C and D are in no way indicators of completion of any block and therefore, the building could not be said to be completed on obtaining form D and no part occupancy certificate could have been granted as only one building permit was sanctioned for the entire blocks and it was not given separately. Therefore, plaintiff was not entitled to get any part occupancy certificate. It is further argued that the hotel block was built in the year 1994 i.e. after considerable period of delay and therefore, the delay has to be attributed upon the plaintiff and plaintiff is liable to pay the penalty as given in the impugned notices dated 29.03.1990 and 21.03.1996 and both the suits are liable to be dismissed.
83. I have heard the arguments and have perused the record carefully.
84. In order to assess whether the delay was attributable upon the plaintiff or defendant, it is necessary to discuss and may be, at the risk of repetition, again certain facts.
85. It is admitted by the parties that a public auction was held on 17.03.1976 and plaintiff had given a highest bid of Rs. One Crore which was accepted by the defendant/ DDA for the suit property and the entire amount was paid and possession was handed over to the plaintiff on 21.10.1976. No Objection Certificate dated 02.11.1976 was also given acknowledging the payment, handing over of possession and the no objection of DDA on constructions of the plot by the plaintiff on submitting the building plan in accordance with the building bye laws and architectural control.
86. The preliminary drawings were submitted by the plaintiff within two months of giving of the no objection certificate i.e. on 24.01.1977. The exemption of Urban Land (Ceiling and Regulation) Act was also obtained by the plaintiff Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 34/45 which was granted on 21.02.1977.
87. PW1 Vijay Singh had categorically stated that the plot was a rocky area and almost one year time was required to cut the rocks and complete the excavation before no possession construction was started on any part of the plot. PW1 has not been cross examined on this point and DW1 in his cross examination has stated that he can not answer the question whether for removing rocks and for excavating the plot for the purpose of commencement of construction atleast one year was required. He also stated that he can not say whether entire plot area was rocky area, though he admitted that it was directed to the plaintiff that no excavation or digging could be done without getting the plan sanctioned. Despite submitting the preliminary drawings in January 1977, the permission to excavate was not given and it was specifically rejected vide letter dated 11.04.1977 which has not been disputed by the defendant anywhere. Thereafter, the guidelines were issued on 14.03.1978 by the DDA and within one week of receiving of these guidelines, plaintiff submitted drawings to DUAC on 22.03.1978 which were approved on 17.05.1978 by DUAC.
88. After, submissions of preliminary drawing the perpetual lease deed was executed on 30.11.1977 i.e. almost 1 ½ year after the plot was sold in auction to the plaintiff by DDA. The plaintiff paid the ground rent at Rs.1 p.a. for three years i.e. till 1979. however, no sanction was granted and on the contrary a letter dated 08.05.1978 was issued to the plaintiff wherein it was stated that plaintiff can construct only a hotel on the said commercial plot and earlier guidelines dated 14.03.1978 issued by the defendant were withdrawn. The plaintiff was also asked to submit the revised plan. He submitted fresh drawings under protest on 16.02.19779 and again on 05.06.1979 as per directions of the defendant. All these facts are not disputed. It is pertinent to mention here that DW1 in his affidavit has Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 35/45 not stated anything in respect to the letter dated 08.05.1978 by which it was directed to the plaintiff that he can construct only a hotel and guidelines dated 14.03.1978 were withdrawn. These drawings were approved by DUAC on 24.06.1979 , however, again on 31.01.1979, DDA issued a letter rejecting the drawings of the plaintiff stating that the floor area proposed for commercial use was more than permissible limit of 25% of FAR to be used for commercial purpose. Despite the fact that there was no such restriction for the lease, the plaintiff was again asked to submit fresh plan. It was also specifically directed to the plaintiff vide letter dated 18.02.1979 that the plaintiff shall not raise any construction. The case was discussed with several authorities including Central Government and it was decided in the meetings conducted on 08.07.1980, that plaintiff shall construct a hotel containing 400 bed instead of 250 beds which were agreed earlier and rest of the available space can be utilized by the plaintiff for the original commercial use. Even after this meeting, the resolution dated 11.08.1980 was passed by the defendant /DDA wherein it was resolved that " Resolved that maximum 17 per cent of the total floor space built up permitted as a commercial and incidental to hotel and the remaining to be used for hotel purposes."
"Resolved further that the space permitted for Commercial/incidental to hotel use be not an independent block but be merged with incidental to hotel activity."
89. This was communicated to the plaintiff on 17.09.1980 and eventually plaintiff filed the writ petition challenging the authority of DDA to restrict the plaintiff from raising commercial blocks. The resolution dated 11.08.1980 was quashed by Hon'ble High Court, the defendant went in an appeal and Division Bench directed the plaintiff to construct a hotel building containing 400 bed and rest of the remaining area was allowed to be used for ordinary commercial use.
Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 36/45 The guidelines dated 08.06.1978 were also quashed and therefore, guidelines dated 14.03.1978 remained effective. This order of Division Bench was of 29.04.1983. It is pertinent to mention here that by this time the building plan was not sanctioned by DDA and even no excavation or digging work had been carried out in the plot for which the plaintiff had claimed that it would take almost one year to make the plot ready for starting construction. Despite passing of the orders by the Division Bench of the Hon'ble High Court , DDA did not approve the plan in time and contrary to that raised a demand of approximately Rs.10,05,684.93 vide notice dated October 29,1983 as alleged area of ground rent. The suit was filed in Hon'ble High Court wherein exparte injunction was granted. However, the injunction was vacated as jurisdiction was that of Arbitrator in view of the application for invoking Arbitration clause was made. Plaintiff filed an appeal and exparte injunction was again granted which had never been challenged. It is stated that this is only on 15.12.1983 that the building plans were sanctioned for the first time.
90. In the Hon'ble High Court, Division Bench referred the matter to the Arbitrator, the Arbitrator vide its order dated 04.09.2010 had come to a conclusion that the plaintiff even had no liability to pay the demand of Rs.10,05,684.93 towards the ground rent and since the sanction has been first given on 15.12.1983 by the DDA, the delay can not be attributed on the plaintiff & it can not be asked to pay the ground rent at the enhanced rate. This order of arbitrator was challenged by the DDA by filing a petition before Hon'ble High Court which was dismissed vide order dated 04.01.2011 and has attained finality. Therefore, it has already been observed that there was no fault of plaintiff in raising the construction till 15.12.1983 as building plans were not sanctioned before that period and the plaintiff was not liable to pay any amount on account of enhanced ground rent. Despite these orders, the defendant in the first present case had levied composition Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 37/45 fees vide impugned notice dated 29.03.1990 Ex. D1W1/46 for the period i.e. 21.10.1979 till 15.12.1983. The construction was started as per the plaintiff in January 1984 which was also intimated to the defendant. Though the plaintiff had started construction however it is worthwhile to notice that original drawings were submitted by the plaintiff in the year 1977 and the building pan was sanctioned on 15.12.1983 and by that time almost seven years have lapsed. The plaintiff apart from incurring expenditure on correspondence with the defendant had to spent a huge amount of money in litigation as disclosed previously. The excavation or the digging work was to be done apart from raising construction. It was now settled that the plaintiff had to construct a hotel building containing 400 bed as per the architectural design and rest of the area can be used for commercial purposes. However, in the lease deed , it is nowhere directed as to which of the area has used first. Defendant DW1 in his examination in chief had time and again laid emphasis upon the fact that the plaintiff deliberately did not construct the hotel first and was interested in construction of commercial area so as to make gains out of it. In this regard, it is stated that the entire lease deed which is Ex. D1W1/5 nowhere stipulates as to which of the area has to be given priority and which building has to be constructed first. The objection to construction of commercial space taken by DDA was beyond terms and conditions of the lease deed which was executed between the parties. Further the DDA has not filed any document to prove in its evidence or has not come up with any cogent evidence in any other form to show that the plaintiff was bound to construct a hotel building only or it was to be constructed first. Therefore as per the plaintiff , he chose to raise construction of the commercial area first which was solely the discretion of plaintiff and defendant had no business to interfere in the same.
91. Further, in February 1984, plaintiff applied for mortgage permission by Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 38/45 intimating the DDA that the plaintiff had to raise Rs. 25 crores from three named financial institutions and 14 named bank. This permission was declined by stating that the permission had already been granted on 06.12.1977.
92. At this stage, it is pertinent to mention here that in clause 4 sub clause
(c), the plaintiff was bound to take previous consent in writing of the defendant to mortgage or charge the plot with any schedule bank or any other financial agency. The plaintiff had explained that permission was sought again as the officials of DDA were demanding fees upto October 20,1979 even after the order of Division Bench of Hon'ble High Court. After a long deliberation and many rounds of correspondence, this permission to mortgage was finally granted on 18.08.1987 by the DDA. It is pertinent to mention here that despite the a mortgage permission was not given, the construction work was being carried out by the plaintiff on the commercial site of the plot and it did not stop the same. The document of lease deed Ex. D1W1/5 reveals that this deed has casted several duties upon the plaintiff and had provided for taking permissions of each and every step by the plaintiff while dealing with the property in question in any manner whatsoever. At the same time, in the lease it was stated that the lessee i.e. plaintiff shall complete the construction within three years from the date of offer of possession of the plot after obtaining design, plans and specification from the DDA. When so much so was to be done by the plaintiff, it was the bounden duty by the DDA to deal with the applications moved by the plaintiff within the reasonable time so that even the day of plaintiff could not have been wasted in raising the construction however, here from the occurrences seen above, it so appear that the entire responsibility was put on the plaintiff and no accountability has been show by the officials of the DDA to deal with the permissions. They were not bound to give reply/permissing objection within any stipulated time. It is clear from the record that each and every application of plaintiff has been dealt with after a considerable delay. Since this Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 39/45 was a huge project, it is practically known that the plaintiff would have survived with financial assistance from the bank or financial institutions only. Since it was also contemplated by the DDA therefore, this stipulation of financial assistance was provided in the lease deed itself. Officials of DDA had challenged each and every act and had tried to penalise the plaintiff for the delay caused on whatsoever ground but there is no answer as to why there was so much reluctancy in giving due permissions at the relevant time. This is not the case of DDA officials that the plaintiff was not raising the building in conformity with the building plans or the architecture design therefore, period the delay caused in getting the mortgage permission could not be attributed to the plaintiff only by saying that this was the responsibility of the plaintiff to raise money for construction of the plot and the DDA officials had got the licence to deal with the permissions in whatever time. The history of this case was a chequered one and plaintiff had to make an extra effort to get even the smallest approval from the DDA which is apparent from the record itself. It is stated that since the building plan in respect of the hotel had become old and in order to improve the internal planning of the hotels and to bring it up to the international standards, the plaintiff submitted revised plan only for the hotel plan on 16.04.1985 which was forwarded by DDA and DUAC on 17.05.1985 and DUAC approved the same on 25.09.1985. On 17.10.1985, Central Government issued a order banning the construction of multistory building. DW1 in his affidavit stated that the delay in approval of revised plans was caused due to non filing of land scaping plan by the architect of the plaintiff and plaintiff was supposed to file , the same alongwith revised plan itself. This is the matter of record that as per the stand of DDA itself, the land scapping plan was received on 22.10.1985 whereas even after that the revised plan was not sanctioned as there was a ban by Central Government regarding stoppage of multistory building. The plan was finally sanctioned on 28.04.1988. DW1 in his affidavit of evidence at one place stated that the ban was applicable only to new constructions and not to Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 40/45 the old one including that of the plaintiff however, the letter Ex. PW1/15 dated 04.11.1985 shows that plans were approved by Secretary of DUAC but final letter of approval was not given due to the ban of the Central Government/Ministry of Urban Development vide instructions/letter dated 17.10.1985. Even after writing of this letter by DUAC to Central Government, it is clear that the revised plans were not sanctioned because of instructions of ban on construction by Ministry of Urban Development. The defendant stated that this ban was not applicable to the plaintiff. Had it been the case that the revised plan would have been approved and communicated to the plaintiff after submissions of land scape plan by the Architect on 22.10.1985, there would have been no delay, but the approval was granted on 24.08.1988 i.e after 2 ½ years.
93. It is again pertinent to mention here that even during this ban , the plaintiff was constructing the commercial block one having 20 stories and the other having 8 stories. Form C and form D in respect of these blocks namely E and F were obtained 14.07.1988 and 08.07.1988 respectively.
94. Ld. Senior Advocate for plaintiff has further argued that once form D was obtained on 28.07.1988, as per guidelines of DDA on 21.07.1988 which are Ex. D1W1/PE, no penalty could have been levied for the entire block.
95. The perusal of guidelines Ex. D1W1/PE dated 21.07.1988 shows that these are guidelines for charging composition fees for delay in construction of building. In clause VI of point 2 of the said guidelines, it is provided that the construction on the plot will be treated substantial if 1/3rd portion of permissible ground floor coverage is constructed and form D is obtained.
96. Ld. Senior advocate for plaintiff has argued that these were the Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 41/45 applicable guidelines as form D was obtained by the plaintiff in respect of block E and F on 28.07.1988 i.e. after the issuance of these guidelines. The other guidelines Ex. D1W1/PF dated 16.01.1989, therefore could not be said to be applicable to the plaintiff on 28.07.1988 as guidelines dated 21.07.1988 were effective at that time. It is not disputed that form D in respect of block E and F were obtained by plaintiff. These guidelines dated 21.07.1988 deals with levying of composition fees of delay in construction of commercial plot and other plots also. Apart from other penalties, the specific rates for delay have been given for different years which are chargeable for per sq meter area according to the size of plot but clause 6 has been put therein which provides that if 1/3rd portion is constructed and Form D is obtained for that constructed area, the construction will be treated as substantial. Though it is not specifically mentioned in the entire guidelines that in case it is done, no composition fees shall be levied however, existence of this clause in the guidelines speak volume of the intention of the makers of the guidelines which can have no other interpretation else than the present one i.e. in case the construction is 1/3rd, and form D has been obtained no composition fees can be levied. Ld. Counsel for defendant had not rebutted this fact or has dealt with it in any other manner during arguments. Therefore, the building was complete and no penalty could have been levied after form D was obtained on 28.07.1988 as the constructed area was more than 50%. DDA did not issue part occupancy certificate however, same was granted by order dated 21.12.1990 by Hon'ble High Court in the earlier suit (1st suit) filed by plaintiff.
97. As regard of arguments of the defendant with respect to non entitlement of the plaintiff to the part occupancy certificate with respect to block E and F, it is relevant to point towards point no. 6 of the sanction granted by DDA to the plaintiff of 15.12.1983 which is Ex. D1W1/13 which says Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 42/45 " The party shall not occupy or permit it to occupy the building or use or permit to be used the building or any part thereof affected by any such work until occupancy/certificate is issued by the Authority".
98. The word 'building and any part thereof" clarifies that the part occupancy certificate could very well be granted for the part construction which was completed and for which the certificate of completion from all the authorities including fire, sewerage, electricity were obtained. The defendant had placed no document on record to show that the plaintiff was not entitled to have this part occupancy certificate. It was not stipulated in the lease deed that the plaintiff would not got the part occupancy certificate. Therefore, this oral plea of defendant that one occupancy certificate could be granted for one building permit can not stand. Their own document Ex. D1W1/13 turns down this plea.
99. The conduct of the defendant which has been discussed above shows that a partial and a biased attitude was adopted by DDA while dealing with the plaintiff. DW1 in his affidavit stated that there was a mistake in lease deed, however it was admitted that the plot was given for commercial purposes and such mistake was never rectified as the covenants of perpetual lease deed could not be changed. Despite having no stipulation the bonafide of the plaintiff are reflected from the fact that it agreed to construct 400 beds in the hotel building despite the agreement of constructing 250 beds earlier. Time and again at every point of time, the correspondence was made and requests were made for passing the approval in time but of no avail. The submissions of revised plan for the hotel block by the plaintiff in the 1984 did not show any lapse on the part plaintiff as it was a dull exercise to construct the hotel building on the basis of old plan which were Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 43/45 submitted in the year 1977. When one raises or construct a building, it visualies coming 10 to 15 years almost and the same has to be constructed in such a way that it meets the requirements of next 10 to 15 years in terms of facilities, structure, facade and internal settings and should not seem to be outdated once it is complete. Despite passing of several orders by the competent courts and other authorities including the Government itself, the officials of DDA choose to act in a particular manner which was arbitrary and capricious. Since the plaintiff had completed more than 50% of the building on 28.07.1988 and form D was obtained in terms of guidelines dated 21.07.1988 therefore, the defendant could not have levied in penalties for the block E and F or for rest of the block which was completed in February 1994.
100. From the discussions made above, it can not be said that delay in raising construction on the said plot in question can be attributed to the plaintiff and hence no penalty for the delay can be levied by the defendant upon the plaintiff. Hence, this issue is decided against the defendant and in favour of plaintiff.
(vii) Whether the plaintiff is entitled for the decree of permanent injunction as prayed for.
101. Defendant has raised demands for levy of composition fees vide notices dated 29.03.1990 and 21.03.1996 challenged by way of present two suits, however they are not accompanied with any break up or detailed calculation showing that what amount has been charged or levied and for what period. The notices are completely arbitrary and non speaking and hence, illegal. The penalty can not be levied upon not anyone without disclosing the calculation of the same which has not been done by the defendant. Despite pendency of the first suit for more than Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 44/45 27 years and 2nd suit for more than 20 years, no efforts was made by the DDA to place the calculation of the same on record. The notices of demand have been issued in clear violation of principles of natural justice. Plaintiff could not even explain that it was not responsible for paying X amount for X period. Hence, this issue is decided in favour of plaintiff and against the defendant.
(ix) Relief.
102. In view of the facts that all the issues have decided against the defendant and in favour of plaintiff, the suit of the plaintiff is decreed. (1) Impugned notice dated 29.03.1990 and 21.09.1996 are declared null and void.
(2) Defendant is restrained from taking any steps in pursuance of non payment of the amount/penalty mentioned in the notice dated 29.03.1990 and 21.03.1996 against the plaintiffs.
(3) Occupancy certificate granted at different times to the plaintiff are made absolute.
103. Decree sheet be prepared.
104. Files be consigned to record room.
Announced in the open court on 17.03.2018 (VANDANA JAIN) ADDITIONAL DISTRICT JUDGE07/ SOUTH EAST DISTRICT/SAKET COURTS NEW DELHI/17.03.21018 Nehru Place Hotels Limited vs Delhi Development Authority (CS no. 718/17) 45/45