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2007 Supreme(Del) 195
High Court Of Delhi
S. RAVINDRA BHAT
VIDEOCON INDUSTRIES LTD. - Appellant
Versus
D. D. A. - Respondents
W. P. (C) 14962 Of 2004
Decided On : 01/29/2007
ANUSUYA SALWAN, B.S.Nagar, MONIKA SHARMA
Headnote:
DDA - Land Allotment - Delhi Development Act, 1957, Rules 42 and 43 of the Nazul Rules - The court upheld the impugned ground rent demand dated 25-8-2003 but quashed the demand for unearned increase dated 22-8-2003. The court directed the DDA to charge the unearned increase at the rate of Rs. 100/- per floor/flat as per the third proviso to clause 6(a) of the perpetual lease deed.
Fact of the Case:
The petitioner sought directions to quash two orders/notices issued by the Delhi Development Authority (DDA) demanding payment towards un-earned increase and ground rent for a commercial plot purchased in an auction. The petitioner challenged the impugned ground rent demand as contrary to Rule 42 of the Nazul Rules, which mandate that nominal ground rent would be payable for a five-year period from the date of lease as opposed to the three-year period stipulated in the lease deed. The petitioner also attacked the impugned demand for un-earned increase on the premise that the merger of two companies did not amount to transfer and that the demands were arbitrary and violative of Article 14 of the Constitution of India.
Finding of the Court:
The court upheld the impugned ground rent demand dated 25-8-2003 but quashed the demand for unearned increase dated 22-8-2003. The court directed the DDA to charge the unearned increase at the rate of Rs. 100/- per floor/flat as per the third proviso to clause 6(a) of the perpetual lease deed.
Issues: The issues involved in the case were the legality and correctness of the DDA's action in demanding ground rent at 2.5% of the lease premium after three years instead of five years, and whether 50% unearned increase is payable towards the transfer of the plot after the amalgamation of two companies.
Ratio Decidendi: The court held that the plot is a part of the Nazul Rules, and the contention of DDA that the Nazul rules make no distinction as to the manner in which lands are placed at its disposal is unacceptable. The court also held that the DDA is bound by the ratio in the decision reported as Indian Shaving products Ltd.-vs- Delhi Development Authority, 95 (2002) DLT 87, which held that amalgamation of two companies would amount to transfer. The court directed the DDA to charge the unearned increase at the rate of Rs. 100/- per floor/flat as per the third proviso to clause 6(a) of the perpetual lease deed.
Final Decision: The petition is partly allowed, with the court upholding the impugned ground rent demand dated 25-8-2003 but quashing the demand for unearned increase dated 22-8-2003. The court directed the DDA to charge the unearned increase at the rate of Rs. 100/- per floor/flat as per the third proviso to clause 6(a) of the perpetual lease deed.
S. RAVINDRA BHAT, J.
( 1 ) IN this proceeding under Article 226 of the Constitution of India, the petitioner claims directions for quashing of two orders/notices dated 22. 08. 03 and 25. 08. 03 issued by the Delhi Development Authority ("dda" ). By the impugned demand dated 22. 8. 2003, the DDA had directed the petitioner to pay Rs. 15,09,31,495/- towards un-earned increase (hereafter referred to as "the impugned UEI demand"); by the second demand dated 25-8-2005, it demanded Rs. 10,74,00,000/- towards ground rent and Rs. 3,56,00,000/- due to interest charges for belated payment on ground rent, both for the period from 28. 11. 1997 to 14. 01. 04 ( hereafter referred to as "the impugned ground rent demand" ).
( 2 ) ONE M/s Skipper Constructions (Pvt ). Ltd had purchased a commercial plot, being No. E-1, Jhandewalan Extention, New Delhi, measuring 2548 sq. mts. (hereafter referred to as "the plot"), for constructing a multi-storeyed commercial complex, sometime in 1980. Some construction was carried out but later, the structure was left un-finished. After protracted litigation and under directions of the Supreme Court, the DDA floated a tender for re-auctioning of the plot with super structure, in 1994.
( 3 ) M/s Banganga Investments Pvt. Ltd. (hereafter "bipl") participated in the auction and submitted its tender, offering to pay Rs. 70. 1 crores for the plot. Since the bid was highest, it was accepted and eventually confirmed by the Supreme Court. The acceptance of the tender was communicated by the DDA to bipl on 06. 12. 94.
( 4 ) THE conditions which had been put to the bidder and had been agreed upon by BIPL, to the extent they are relevant, are re-produced below:
"3. GROUND RENT i)Every successful tenderer/allottee shall be liable to pay, in addition to the premium payable, ground rent for holding Nazul land allotted to him at the rate of rupee one per annum per plot for the first three years from the date of allotment i. e. the date of issue of the allotment letter, and thereafter it shall be payable at the rate of two and half percent (2 "%) of the premium originally payable per annum. ii)The rate of ground rent shall be subject to enhancement after a period of thirty years from the date of allotment. iii)An interest @ 10% per annum or such other rate, as the DDA/lessor may in its absolute discretion decide from time to time will, without prejudice to the right of re-entry under the lease, be charged on all delayed payments in respect of ground rent. Such interest will be calculated for full fortnight on month, as the case may be, and not for fraction thereof. 4. EXECUTION OF LEASE DEED AND OTHER MAIN CONDITIONS OFLEASE: (v) (a) The successful tenderer/allottee shall not sell, transfer, assign or otherwise part with the possession of the whole or any part of the Commercial plot except with the previous consent in writ of the Lessor which he shall be entitled to refuse in his absolute discretion. PROVIDED that in the event of the consent being given, the Lessor may impose such terms and conditions as he thinks fit and the Lessor shall be entitled to claim and recover a portion of the unearned increase in the value (i. e. the difference between the premium paid and the market value) of the commercial plot at the time of sale, transfer assignment, or parting with the possession, the amount to be recovered being fifty percent of the unearned increase and the decision of the Lessor in respect of the market value shall be final and binding. PROVIDED FURTHER THAT the Lessor shall have the pre-emptive right to purchase the whole property or any part thereof that may be subject of sale, transfer, assignment or otherwise parting with the possession as the case may be, after deducting fifty percent of the unearned increase as aforesaid. PROVIDED FURTHER that not withstanding the limitation and conditions as mentioned in sub-clause vi (a), the successful tenderer/allottee may sell or transfer the floor space constructed on the p
