Back
2020 Supreme(Del) 493
IN THE HIGH COURT OF DELHI AT NEW DELHI
Vibhu Bakhru, J.
Eagle Theatres & Anr. - Petitioners
Versus
Union of India & Ors. - Respondents
W.P. (C) 7230 of 2014
Decided On : 30-04-2020
For the Petitioners:Mr Amir Singh Pasrich, Mr. Amit Ranjan Singh and Ms Kanika Agnihotry, Advocates
For the Respondents:Mr. Jasmeet Singh, CGSC with Mr. Srivats Kaushal and Mr. Devank Maheshwari, Advocates for the UOI
The central legal point established in the judgment is the need to calculate conversion charges for leasehold property used as cinema sites based on the specific rates applicable at the time of the application and the impugned notification, in compliance with previous court orders and the respondents' obligations to notify the rates for cinema sites.
Headnote:
Conversion Charges - Leasehold Property - Notification dated 29.05.2013 - [Section 10, Perpetual Lease Deed dated 16.04.1937; Clause II of the letter dated 24.06.2003; Article 14 of the Constitution of India; Order dated 21.07.2009; Impugned Notification dated 29.05.2013] - The court discussed the calculation of conversion charges for leasehold property used as cinema sites, based on the land circle rates prevailing on the date of the application for conversion or on the date of the issuance of the impugned notification. The court analyzed the historical background, previous litigation, and the respondents' obligations to notify the rates for cinema sites. It highlighted the petitioner's contention of discrimination and arbitrariness, which was rejected by the court based on previous decisions. The court emphasized the need to calculate conversion charges based on the rates applicable at the time of the application and the impugned notification, directing the respondents to process the application accordingly.
Fact of the Case:
The petitioners challenged the notification dated 29.05.2013 and the impugned advisory, seeking conversion of leasehold property to freehold property used as cinema sites. The petitioners contended that they had paid the entire conversion fee based on the land circle rates applicable at the time of the application for conversion. The respondents argued that the charges should be calculated based on the rates stipulated in the impugned notification dated 29.05.2013. The dispute revolved around the calculation of conversion charges for the property.
Finding of the Court:
The court found that the respondents were obligated to process the petitioner's application based on the rates applicable at the time of the application and the impugned notification. It rejected the petitioner's contention of discrimination and arbitrariness, citing previous decisions that upheld the differentiation of cinema and hotel sites from other commercial properties. The court emphasized the need to calculate conversion charges based on the specific rates for cinema sites and commercial properties, directing the respondents to comply with the previous court orders and process the application accordingly.
Issues: The main issue was whether the calculation of conversion charges for leasehold property used as cinema sites should be based on the land circle rates prevailing at the time of the application for conversion or on the date of the issuance of the impugned notification dated 29.05.2013. Additionally, the dispute involved the petitioner's contention of discrimination and arbitrariness in the classification of properties for conversion charges.
Ratio Decidendi: The court's decision was based on the interpretation of previous court orders, the respondents' obligations to notify rates for cinema sites, and the need to calculate conversion charges based on the specific rates applicable at the time of the application and the impugned notification. The court emphasized the importance of complying with previous court orders and processing the petitioner's application accordingly.
Final Decision: The court directed the respondents to process the petitioner's application by computing the conversion charges based on the rates applicable at the time of the application for the portion of the property used for commercial purposes and the rates specified in the impugned notification for the portion used for cinema, in accordance with the historical background and previous court orders.
JUDGMENT :
VIBHU BAKHRU, J.
1. The petitioners have filed the present petition, inter alia, impugning the notification dated 29.05.2013 (No. F. 24 (372)/2006-CDN/261 – hereafter “the impugned notification”) issued by respondent no. 2 (Land and Development Officer – hereafter “L & DO”), wherein the conversion rates for leasehold property to freehold property of hotel/cinema sites were notified. The petitioners further impugn the Advisory Note dated 20.12.2006 (No. 19(68)2002-EII(B) –hereafter “the impugned advisory”) issued by respondent no. 3 (The Ministry of Finance), wherein respondent no. 3 advised L&DO with reference to the rates of conversion of hotels and cinema property from leasehold to freehold property.
2. The petitioners contend that it has already paid the entire conversion fee of Rs.52,68,564/-as per the land circle rates applicable on the date the petitioner filed its conversion application. L&DO contends that the abovementioned amount was paid on the basis of self-assessment and the said amount is not the final amount that is payable as per the new rates as applicable for cinema sites, which have been notified by the impugned notification dated 29.05.2013.
3. The respondents state that the petitioner’s case was examined in the light of the impugned notification dated 29.05.2013 and the impugned advisory and it was decided that the conversion charges would be calculated on the basis of the specific area being used for the specific purpose: the area under cinema would be charged as per the rates stipulated for a cinema site and the area under commercial use would be charged as per commercial rates. It was also decided that the crucial date for calculation of the conversion charges would be 29.05.2013.
4. The principal controversy that arises in this petition is whether the calculation of the conversion charges payable by the petitioner for the conversion of leasehold property to freehold property used as cinema sites, is to be determined as per the land circle rates prevailing on the date on which the application for conversion was made by the petitioner – that is, on 11.03.2004/ 26.02.2004 – or on the date of the issuance of the impugned notification (i.e. 29.05.2013).
Factual Background
5. Petitioner No. 1 (hereafter “the petitioner”) is a partnership firm. Petitioner no. 2 is a constituent partner of petitioner no.1 firm and is one of the lessees under a perpetual lease of land and built up area, commonly known as Plaza Cinema building in Block-H, Connaught Place, Rajiv Chowk. The area used as a cinema hall, the cinema hall’s related offices (ticketing office etc.), toilets and cinema food area (where popcorn and snacks are sold) is about 8550 square feet, out of a total building built-up area of 45,528 square feet.
6. The Government of India granted leasehold rights to Mangal Dass Verma, T.C. Verma & K.C. Verma, for an area admeasuring 32,710 sq. feet or 0.75 acres on Plot No. 10, H-Block, Connaught Circus, New Delhi-110001, by virtue of a Perpetual Lease Deed dated 16.04.1937. The said rights were granted with effect from 02.04.1934. As per Clause 10 of the said Perpetual Lease Deed dated 16.04.1937, the plot consisted of “theatre, cinema and motor shop with flats above”. With the consent of Chief Commissioner of Delhi, a building by the name of ‘Plaza Cinema Building’ was constructed on the said plot.
7. On 24.05.1940, Mangal Dass Verma, T.C. Verma & K.C. Verma assigned the leasehold rights to the Plaza Cinema building and the land appurtenant thereto to Laxmi Insurance Co. On 11.10.1954, Laxmi Insurance Co. assigned the leasehold rights to the Plaza Cinema building and the land appurtenant thereto to Western India Theatres Ltd. On 18.04.1957, Western India Theatres Ltd. assigned the leasehold rights of the Plaza Cinema building and the land appurtenant thereto to Khan Bahadur C.B. Taraporvala, the financial advisor to the Nizam of Hyderabad.
8. Khan Bahadur C.B. Taraporvala, the financial advisor to Nizam of Hyderaba
