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2010 Supreme(Del) 647

IN THE HIGH COURT OF DELHI AT NEW DELHI
MR. JUSTICE VIKRAMAJIT SEN HON'BLE MS. JUSTICE MUKTA GUPTA
Anuradha Sharma Prop. Of M/s. New Shehnai Banquet and Restaurant ..... Appellant Versus
Municipal Corporation of Delhi .... Respondent
FAO (OS) 140/2010
FAO (OS) 141/2010
Decided on: 08th October, 2010

Advocates appeared:
Mr. Rajesh Gupta and Mr. Deepak Arora, Advs.
Mr. Vivek K.Tankha, ASG with Ms. Maninder Acharya, Mr. Praful Shadilya, Mr. Rishabh and Mr. Samar Sodhi, Advs.

Headnote:

Delhi Municipal Corporation Act, 1957 - Section 200 - Constitution of India - Article 226 - Licensed properties of MCD sought to be converted into lease hold on the basis of market rate of L & DO/DDA or on the basis of rates fixed by the Reserve Price Fixation Committee to be constituted by the Commissioner, MCD - No concluded contract between the Appellants and the competent authority of the Respondent - Conversion of the licenses to lease hold had neither been approved by the Commissioner nor by the Corporation as required u/Sec. 200 of the Act - No prima facie case made out - Appeals dismissed.

JUDGMENT

MUKTA GUPTA, J.

1. These Appeals are directed against a common Impugned Order dated 27th January, 2010 whereby the Appellants' Applications under Order XXXIX Rule 1 and 2 were dismissed and that of the Respondent under Order XXXIX Rule 4 CPC were allowed thereby vacating the ex parte status quo order granted in favour of the Appellants.

2. The Appellants were the successful bidders of the tenders invited in the year 2001 by the Respondent for licenses in respect of open air restaurants on the premises granted by the Respondent whereupon the Appellants started restaurants in the name of “Cup-n-Saucer Open Air Restaurant” and “M/s New Shehnai Banquet Hall & Restaurant” from Minto Road and Asaf Ali Road respectively. The licenses were executed on 8th January, 2002 and 16th October, 2002 valid for five years.

3. The case of the Appellants is that before the expiry of the license period in view of the Resolution No.494 of the Municipal Corporation of Delhi (MCD) permitting the licensed properties of MCD to be converted into lease hold on the basis of market rate of L&DO/DDA or on the basis of rates fixed by the Reserve Price Fixation Committee to be constituted by the Commissioner, MCD, the Appellants applied to the Chairman, MCD for conversion of their license to lease hold on 16th March, 2007.

4. The applications of the Appellants were processed and in terms of the policy the MCD by its letter dated 22nd March, 2007 raised a demand of `2,31,30,919/- and `4,29,72,791/- respectively from both the Appellants which was duly deposited by them. The MCD also granted no objection for mortgaging the lease hold rights in the property whereby both the Appellants got loans from the Bank. After depositing the requisite amounts and furnishing the Affidavits including filing of an Affidavit binding them to deposit any additional charges as may be raised by the Respondent, the Appellants requested for execution of the lease deed. It is contended that though the MCD was then obliged to execute the formal lease deed in favour of the Appellants, however, the MCD started delaying the execution of the same on one pretext or the other and transferred the case of the Appellants to Remunerative Projects Cell (R.P. Cell). Constrained by the inaction of the Respondent in not fulfilling its commitment and obligations in terms of its policies and Resolution, the Appellants filed the civil suits seeking a decree of specific performance for execution of a lease deed wherein initially ex parte status quo orders were granted. However, subsequently pursuant to the Respondent?s appearing the Applications were dismissed and the status quo orders vacated by the Impugned Order dated 27th January, 2010.

5. Learned counsel for the Appellants contends that as the Commissioner himself had forwarded the Applications to his subordinates there was no requirement of subsequent approval, that is, the matter was not required to be referred back to the Commissioner again. The only exception in the Resolution No. 494 was in respect of people occupying the roads, footpaths etc. or holding tehbazari rights. Thus, the suit properties not falling within the exclusion clause would be part of the general policy of the Corporation. None of the resolution contemplates or provide for any distinction between remunerative or highly remunerative “stand alone” sites and markets. According to them the Respondent having retained the money of the Appellants the doctrine of promissory estoppel would come into play as pursuant to the demand raised by the MCD the Appellants deposited the amounts and it was also reasonable on the part of the Appellants to assume a legitimate expectation that the Respondent would carry out its part of the obligation as the Appellants had already performed theres. Reliance is placed on Spring Meadows Hospital vs. Harjot Ahluwalia, (1998) 4 SCC 39, to state that the policy being a beneficial one, it must be construed liberally in favour of the A










































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