Translate
Text Highlighter

Bookmark

PDF

Share

Report a problem
AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
  • Mr. A.S Chandhiok with Mr. Aram Gupta, Advocate for Petitioner.
  • Ms. Ansuya Salwan, Advocate for Respondent.
Judges
  • P.N Nag, J.
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Click here to upload
Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
  • Mr. A.S Chandhiok with Mr. Aram Gupta, Advocate for Petitioner.
  • Ms. Ansuya Salwan, Advocate for Respondent.
Judges
  • P.N Nag, J.
See more information ...
Smart Summary

Structured Summary of the Opinion (P.N. Nag, J.)

Factual and Procedural Background

The petitioner was granted a perpetual lease by the President of India dated 18 November 1970 over Industrial plot No. 91, Block A, measuring 2,420 sq. yards in Okhla Industrial Area, Phase-II, New Delhi (registered 9 December 1970). Clause 4(a) of the lease initially required construction within two years from 3 March 1970; that period was admittedly extended up to 31 December 1981 by letter dated 21 September 1981 (Annexure-P.1).

The petitioner did not complete construction by the extended date and applied for further extension on 3 April 1982 (Annexure-P.II), apparently in view of a DDA Notification dated 26 March 1982. The Delhi Development Authority (DDA) issued an order dated 15 November 1984 (Annexure-P.VI) determining (cancelling) the lease and asked the petitioner to hand over possession; failure to do so would be treated as resumed possession.

The petitioner filed a representation dated 19 November 1984 for restoration of the lease. The DDA replied that restoration could be acceded to on payment of dues amounting to Rs. 94,533 (composition fee for belated construction up to 31.12.85 Rs. 65,579; restoration charges Rs. 20,240; interest Rs. 8,714). The petitioner initially deposited Rs. 47,266.50 (asserting liability only to the "usual composition charges" under the 26 March 1982 Notification) but ultimately deposited the balance to make up Rs. 94,533 as demanded; DDA accepted this amount.

During pendency of the writ petition, counsel for the petitioner informed the Court (8 September 1989) that the petitioner was prepared to pay interest on the delayed payment and sought restoration. Despite payments and offers, the lease was not restored, and the petitioner sought quashing of the cancellation order (Annexure-P.VI).

Legal Issues Presented

  1. Whether the petitioner is entitled to sanctioning (revalidation) of the building plan and commencement of construction on payment of the usual penalty under the Delhi Development Authority Notification dated 26 March 1982.
  2. Whether the impugned order of cancellation (determination) of the lease dated 15 November 1984 should be quashed and the lease restored where the petitioner deposited the amounts demanded and offered to pay interest on delayed payment.

Arguments of the Parties

Petitioner's Arguments

  • The petitioner relied on the DDA Notification dated 26 March 1982 and applied for extension/revalidation on 3 April 1982.
  • The petitioner initially paid Rs. 47,266.50 contending that under the Notification that represented the usual composition charges, and subsequently deposited the balance so that Rs. 94,533 was paid as demanded by DDA.
  • During proceedings the petitioner offered to pay interest on delayed payment (counsel stated readiness to pay interest on the Rs. 94,533).

Respondent's (Delhi Development Authority) Arguments

  • The DDA's case (as recorded) was that the 26 March 1982 Notification applied only where construction had already started; it did not cover the petitioner's situation.
  • The respondent contended that the sanction letter dated 10 November 1981 had already granted what the Notification would have permitted: clause 4 required commencement within one year of sanction and completion within two years (interpreted as commencement by 9 November 1981 and completion by 9 November 1983).
  • The respondent also contended the petitioner had not carried out construction except excavation to an average depth of 6–8 ft, and therefore DDA had a right to determine the lease.
  • The respondent disputed the petitioner's contention that a lower composition fee under a Notification (dated 24 March 1982, per petitioner’s submission) applied and submitted that this was a disputed question of fact not suitable for resolution in the writ petition.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court proceeded by applying the facts to legal principle and the parties' concessions as recorded:

  1. The Court noted that the DDA itself had indicated restoration could be acceded to upon payment of certain sums and that the petitioner had deposited the demanded amount (Rs. 94,533) and offered to pay interest on delayed payment. Given that the petitioner met the financial conditions and offered further interest, the Court considered there should have been no objection to restoring and regularising the lease once DDA had agreed to restoration on payment.
  2. The Court relied on the constitutional mandate of equality and non-arbitrariness under Article 14, observing that a statutory authority (here DDA) cannot act arbitrarily; this principle underpinned the direction to restore the lease where conditions had been met.
  3. On the factual point of whether excavation alone amounted to commencement of construction (a point relied upon by respondent to deny coverage under the Notification), the Court held that excavation to average depths of 6–8 ft was part of construction because it was directly related to foundation and basement works—therefore qualifying as construction for the purposes of the Notification and the dispute.
  4. The respondent's reliance on the sanction letter dated 10 November 1981 (Annexure-PV) was examined. The Court observed that after termination of the lease the sanction letter could not assist the respondent: without a valid lease the petitioner could not lawfully raise construction, and consequently the earlier sanction had become "meaningless and redundant." The Court therefore rejected the contention that the earlier sanction negated the petitioner's entitlement under the Notification.
  5. The Court recognized a distinct factual dispute raised by the respondent about whether the petitioner was entitled to a lesser payment under a different Notification (referred to by counsel for the petitioner as dated 24 March 1982). The Court declined to resolve that disputed factual question in the writ petition, but kept the point open and left the petitioner free to seek appropriate remedy in a proper forum.
  6. On the basis that the petitioner had deposited the dues and offered interest, and noting DDA's earlier assent to restoration upon payment, the Court concluded that the cancellation order could not be sustained. The Court therefore directed restoration, payment of interest at the agreed rate (12% p.a. as the petitioner undertook), and revalidation/extension of the plan and period as contemplated under the sanction letter in view of the Notification.

Holding and Implications

Holding: The Court's final disposition was that the impugned order of cancellation of the lease (Annexure-P.VI) is QUASHED and the Delhi Development Authority is directed to RESTORE THE LEASE forthwith, subject to payment of interest at the rate of 12% per annum on the delayed payment as discussed in the opinion. The DDA was also directed to revalidate the sanctioning of the plan and to extend the period under clause 4 of the letter dated 10 November 1981 in view of the Notification dated 26 March 1982. The Court ordered no costs.

Direct consequences for the parties:

  • The petitioner obtains quashing of the lease-cancellation order and immediate restoration of the lease on the financial terms set out (including payment of interest at 12% p.a. on delayed payments as undertaken).
  • The DDA is required to revalidate and extend the plan-sanction period as specified by the Court.
  • The Court left open the separate factual dispute about entitlement to a lesser amount under an alternative Notification; the petitioner is free to pursue that issue in an appropriate forum.

Broader implications: The opinion does not announce or discuss a new precedent beyond its application of Article 14 and the particular facts before the Court. The decision's effect is primarily remedial between the parties rather than a general pronouncement of new law.

Show full summary ...

    Jallo Subsidiary Industries Co.(India) Private Ltd v. Delhi Development Authroity. .

    P.N Nag, J. (Oral):— The short question for determination in this writ petition is whether the petitioner is entitled to the sanctioning of the building plan and commencement of construction on payment of usual penalty in view of the Notification issued by the Delhi Development Authority, published on 26th March, 1982 (Annexure-P.IA).

    2. The brief relevant facts leading to the filing of the present petition are that the petitioner was granted a perpetual lease vide lease deed dated 18th November, 1970 by the President of India of a plot of land being the Industrial plot No. 91, Block No. A, measuring 2420 sq.yards in the lay-out plan of Okhla Industrial Area, Phase-II, New Delhi, which was registered on 9th December, 1970. As per clause 4(a) of the lease, the period for construction of the plot was two years from 3rd March, 1970. However, the period later on was admittedly extended upto 31st December, 1981 vide letter dated 21st September, 1981, Annexure-P.1 However, it appears that the building was not completed by the petitioner, as according to him it was not humanly possible to construct this building up to 31st December, 1981. He applied for extension of period for completing the construction vide letter dated 3rd April, 1982, Annexure-P.II This application, appears to have been made in view of the Notification issued by the Delhi Development Authority on 26th March, 1982. The constrtuction of the plot could not be completed within the stipulated period and the Delhi Development Authority on 15th November, 1984, vide the impugned order Annexure-P.VI determined the lease and conveyed the termination of the lease to the petitioner and the petitioner was asked to handover the possession of the plot in question. It was further stated therein that in case he failed to hand over the possession of the plot, the possession of the plot will be treated as resumed.

    3. Again the order of cancellation of the lease, the petitioner made representation dated 19th November, 1984 for restoration of the lease and the Delhi Development Authority wrote to the petitioner that his request for restoration of lease in respect of the plot in question can be acceded to subject to the payment of the following dues:—

    1. Composition fee for belated construction upto 31.12.85……………….Rs. 65,579.00

    2. Restoration charges…….Rs. 20,240.00

    3. Interest charges on belated payment of premium………Rs. 8,714.00

    Total:—Rs. 94,533.00

    4. It appears that the petitioner deposited an amount of Rs. 47,266.50 with the Delhi Development Authority, as according to him he was only liable to pay the aforesaid amount in view of the Notification dated 26th March, 1982 and this amount is on account of usual composition charges. However, the Delhi Development Authority seriously disputed the amount which the petitioner was required to deposit. Thereafter, the petitioner thereafter deposited the balance amount to make up the deficiency i.e Rs. 94,533/-, as demanded by the Delhi Development Authority vide letter dated 19th April, 1985, Annexure-P.VII, which was accepted by the Delhi Development Authority.

    5. However, during the pendency of the petition, it transpired that on 8th September, 1989, Mr. A.S Chandhiok, learned counsel for the petitioner submitted before the Court that in order to avoid further litigation, the petitioner was prepared to pay even interest on the delayed payment of Rs. 94,533/-, as referred to in the letter dated 19th April, 1985, Annexure-P.VII Inspite of the compliance by the petitioner to the terms of the letter dated 9th April, 1985, Annexure-P.VII, lease was not restored by the Delhi Development Authority. Therefore, the petitioner has sought for the quashing of the impugned order of cancellation of the lease dated 15th November, 1984, Annexure-P.VI

    6. The stand of the respondent in substance is that the application of the petitioner is not covered by Notification dateds 26th March, 1982. According to the respondent, the Notification is applied only in cases where tdhe construction had already started. Secondly, the petitioner is entitled to get its plan sanctioned and also to commencement of the construction on payment of usual penalty as provided in the Notification. But that sanction has already been given by the Delhi Development Authority vide letter dated 10th Novembver, 1981. Under clause 4 thereof the erection of the building or execution of the work shall be commenced within one year of the date of this sanction and completion not later than two years from the date of sanction. However, the validity of building plans will remain for two years. In other words, the petitioner was required to commence the construction upto 9th November, 1981 and complete it upto 9th November, 1983. Therefore, whatever the petitioner was entitled” to in view of the Notification, that stood already granted to him by this letter.

    7. There is no dispute that during the pendency of the writ petition, the petitioner has already deposited an amount of Rs. 94,533/- as was requird to be deposited vide letter dated 19th April, 1985.

    8. It further transpired that during the course of the proceedings of the court that the order dated 8th September, 1989, was passed, according to which the petitioner was also prepared to pay inerest on the delayed payment of Rs. 94,533/- and the Court also observed that the Delhi Development Authority0 might consider the request of the petitioner for restoration of the lease.

    9. In my opinion, when whatever the amount as asked for by the Delhi development Authority from the petitioner was deposited by him and he was even prepared to pay the interest on the delayed payment, there should not have been any objection on the part of the Delhi Development Authority to restore and regularise the lease of the petitioner, once they themselves have agreed for restoration of lease on certain payment, as referred to earlier. It goes without saying, in accordance with mandate of Article 14 of the Constitution the statutory authority cannot afford to act arbitrarily.

    10. Learned counsel for the petitioner conceded that the petitioner is ready to pay interest at the rate of 12% p.a on the amount of Rs. 47,266.50 upto 9th April, 1988 and on the balance amount the interest would be paid from 20th May, 1985 to 9th September, 1987. In any case, if there is any dispute about the calculation of interest on the delayed pyment, that can be settled by the parties.

    11. In these circustances, the impugned order of cancellation of lease cannot be sustained and the Delhi Development Authority is directed to restore the lease forthwith to the petitioner, subject of course on the payment of interest on the delayed payment within two weeks from today, as the petitioner has undertaken to pay.

    12. The submission of learned counsel for the respondent that the case of the petitioner is not covered by the Notification as no construction was carried out on the plot in question except the work of excavation to the average depth of 6 to 8 ft. and, therefore, Delhi Developmet Authority has every right to determine the lease. must also fail as, in my opinion, the work of excavation which has been carried out on the plot in question is a part of the construction as the work of excavation is directly related to the foundation and construction of the basement.

    13. The next submission of Ms. Salwan, learned counsel for the respondent is that though the petitioner applied for revalidation of the sanctioning of the plan and for the extension of the time for commencement of the construction on 3rd April, 1982 within the period stipulated in the Notification dated 26th March, 1982, but that sanction was already given to the petitioner vide letter dated 10th November, 1981, Annexure-PV, and under clause 4 thereof it was provided that erection of the building or execution of work shall be commenced within one year of the date of this sanction and completion not later than two years from the date of sanction. In this connection it may be reiterated that the lease of the petitioner had already been terminated and it is obvious that without a valid lease the petitioner cannot raise any construction on the plot in question. Therefore, the sanction granted by the Delhi Development Authority vide letter dated 10th November, 1981, Annexure-PV, under clause 4 thereof has become meaningless and redundent. Therefore, this letter is of no assistance to the respondent and this contention also must fail.

    14. Since the lease is required to be restored to the petitioner, in view of what has already been stated above and consequently the period as contemplated under clause 4(a) has p73 necessarily to be extended and the petitioner would be entitled to extension of time for the sanction of the building plan and for commencement of the construction in view of Notification dated 26th March, 1982, on payment of usual penalty.

    15. Mr. Chandiok submits that he is liable to the payment of lesser amount in view of the Notification dated 24th March, 1982, than what is demanded from him by the Delhi Development Authority vide Annexure-P.VI Ms. Salwan, learned counsel for the respondent, however, contests this submission and contends that it is a disputed question of fact which cannot be gone into in this writ petition. In this connection, it may be pointed out that the petitioner has already agreed to make certain payment before the Court and normally it is not permissible to raise this point. However, I keep this question open, and the petitioner shall be at liberty to move the appropriate forum for such remedy.

    16. In the light of what has been discussed above, the impugned order of cancellation of the lease of the petitioner (Annexure-P.VI) is quashed and the Delhi Development Authority is directed to restore the lease forthwith on payment of interest at the rate of 12% pa. on the delayed payment, as discussed above and is further directed to revalidate the sanctioning of the plan and extend the period thereof, as contemplated vide ietter dated 10th November, 1981 under clause 4 thereof in view of notification dated 26th March, 1982. There will be no order as to costs.

    Use AI to get other relevant cases.
    Try AI Pro free for 7 days Upgrade to AI Pro

    Comments

    Jallo Subsidiary Industries Co.(India) Private Ltd v. Delhi Development Authroity. .
    (Jan 12, 1993)