Administrative authorities are obligated to provide explicit, evidence-based justifications when imposing financial penalties. Demands lacking clarity regarding the period, area, and calculation, combined with reliance on unverified inspection reports and failure to serve due notice, are inherently arbitrary and violate principles of natural justice.

JUDGMENT :

JYOTI SINGH, J.

1. This writ petition is preferred on behalf of the Petitioners under Articles 226 and 227 of the Constitution of India for quashing letters dated 24.10.2013, 08.07.2014 and 29.06.2021 issued by Respondent/DDA with a direction to DDA accept the conversion application bearing No. 01629 dated 24.09.2012 filed by Petitioner No. 1 and execute a Conveyance Deed in respect of Plot No. C-49, Okhla Industrial Area, Phase-II, Delhi (‘subject property’) in favour of M/s R.M.X Joss through its proprietor Mr. Rahul Mehta/Petitioner No. 1.

2. To the extent necessary, the facts as pleaded in the writ petition are that on 05.04.1974, M/s Western India Electrical Corporation (‘M/s Western’) was granted permission to carry out construction on subject property and on 31.03.1978, DDA executed a Perpetual Lease Deed in its favour. Occupancy Certificate was issued on 06.07.1979 with respect to the entire building constructed on the plot i.e., ground floor, first floor, mezzanine floor and basement. The built-up area of ground floor was 7110 sq. ft; first floor was 469 sq. ft; mezzanine floor was 2032 sq. ft; and basement was 3942 sq. ft, as recorded by MCD in its Rectification Order dated 26.06.2002, which is an order rectifying House Tax Assessment Order passed by the MCD on 10.11.1999, where the rateable value was confirmed ex parte (hereinafter referred to as ‘Rectification Order’).

3. It is stated that M/s Western executed a registered Agreement to Sell dated 16.11.1995 in favour of M/s R.M.X Joss, through its proprietor Petitioner No. 1, for sale of the plot as well as building structures thereon, including other fittings and fixtures etc. Registered irrevocable Power of Attorney dated 16.11.1995 was also issued by M/s Western in favour of Petitioner No. 2, wife of Petitioner No. 1. Petitioner No. 1 decided to carry out some additions/alterations to the existing structure and submitted a request vide letter dated 19.11.1998 for permission, which was granted by the concerned statutory authority vide communication dated 15.12.1998, as per the Sanction Plan. On 22.02.1999, water connection was disconnected to the subject property and all industrial operations on the subject property were seized on 01.03.1999 to carry out the construction. On 18.03.1999, the existing electricity connection was also disconnected and only temporary connection was granted for construction purposes to the subject property.

4. It is averred that civil work was completed in December, 1999 and interior work began. MCD granted Form-D for sanitary and water works, while water supply was restored on 03.08.2000 followed by sanction of new electrical connection on 06.09.2000. Between March, 1999 to October, 2000, no manufacturing or industrial activity was carried on the subject property in view of ongoing construction/renovation and post-renovation, the area of the mezzanine floor increased from 2032 sq. ft to 10,692 sq. ft between 2000 to 2001.

5. It is averred that on 03.10.2012, Petitioners applied for conversion of subject property from leasehold to freehold and Petitioner No. 1 deposited a sum of Rs. 1,12,62,263/- towards conversion charges. On 04.02.2013, DDA officials inspected the subject property and no misuse was found, which is evident from the noting in paragraph 6(a) of Inspection Report dated 04.02.2013 and Petitioner No. 1 was informed that the subject property was compliant with terms of Perpetual Lease Deed and other applicable rules and regulations and conversion application shall be