Reva Khetrapal, J.

1. The present petition seeks to assail letter dated 24.3.2004 issued by the Respondent No.1/DDA whereby the lease of the plot at A-1/166, Pankha Road, Janak Puri, New Delhi has been cancelled and determined by the Respondent No.1 and letter dated 30.7.2003 rejecting the application filed by the Petitioners for conversion of leasehold rights in the aforesaid property into freehold on the ground of non-payment of the misuse charges of ` 75,10,178/-.

2. The background facts necessary for the decision of the present writ petition are that on 27.3.1974 vide a perpetual lease executed by the President of India the plot at A-1/166, Pankha Road, Janak Puri, New Delhi was allotted to Smt. Nirmala Sharma and others, who eventually constructed a building comprising of basement, ground floor, first floor and second floor on the said plot. After the original allotment of the plot in the name of Smt. Nirmala Sharma and others, the property changed hands a number of times. The said premises were eventually purchased by the Petitioners on 20.12.1993 by way of a General Power of Attorney and an Agreement to Sell. The Respondent No.1 was throughout aware of these proceedings but never bothered to question the same prior to the issuance of the impugned letter dated 24.3.2004.

3. The original allottee of the leasehold plot Smt. Nirmala Sharma received a show cause notice dated 23.10.1997 from Respondent No.1 alleging that the premises in question were being used for running a Banquet Hall in breach of the terms of the lease. In response to this, the Petitioners replied vide letter dated 15.11.1997 that it was not possible to run a Banquet Hall in the said premises and stating: “This full building is constructed as a house and how it is possible that the small rooms can be used as a Banquet Hall and I do not have any hall in this building.” Apparently, this reply furnished by the Petitioners satisfied the Respondent No.1, for no further notice or communication was received by the Petitioners from the Respondent No.1 in this regard.

4. In the meanwhile, vide notification No.H-11017/7/91-DDIB, S.No.1392 dated 22.5.1999, the Central Government by way of an amendment to the Master Plan for Delhi allowed Banks, Nursing Homes and Guest Houses on residential plots under “Mixed Land Use Regulations”, subject to certain conditions and guidelines including payment of permission fee. Salient features of these were stated as follows:-“6. Restriction on Canteen and Restaurant in Guest House: No commercial activity in the form of canteen or restaurant will be permitted. Catering will be allowed only for the residents of the Guest House/Nursing Homes. 7. Permission Fee: A permission fee will be charged at the rate of 10% per annum of the difference between the current commercial rate and current residential rate as approved by Ministry of Urban Affairs and Employment. The fees will be based on the actual floor area utilized for such non-residential purpose. Where residential premises are already being put to such non-residential use, the same will be regularized on their payment of permission fees from the current financial year. 8. Payment of Fee: The amount of permission fee is to be paid by the applicant on each financial year within first 6 months. Non-payment of permission fee may amount to closure/sealing (sic.) of the premises with recovery of 100% misuse fee.”

5. On an application filed by the Petitioners vide letter dated 23.8.1999, the Respondent No.1 granted its permission and no objection to the Petitioners to use the said premises for running a Guest House vide their letter/No Objection Certificate dated 30th August, 1999 “subject to meeting the requirements of the guidelines issued by the Ministry of Urban Affairs and Employment vide no.H-11017/7/91-DDIB dated 7.5.99 as part of the amendment in the Mixed Land Use Policy of MPD-2001 from the planning point of view DDA has no objection in running the guest house in the