Court No. - 3
Case :- FIRST APPEAL FROM ORDER No. - 689 of 2018 Appellant :- M/S Diamond General Trading Respondent :- U.P. State Industrial Development Corporation Counsel for Appellant :- Rishabh Agarwal Counsel for Respondent :- Sunil Kumar Mishra,Mahesh Chandra Chaturvedi,Mahesh C, Haturvedi
Hon'ble Pankaj Mithal,J. Hon'ble Rajiv Joshi,J.
1. The plaintiff-appellant has preferred this appeal against the order dated 19.01.2018 passed by the court of first instance rejecting the application for interim injunction in original suit No.483 of 2017.
2. We have heard Sri Rishabh Agarwal, learned counsel for the plaintiff-appellant and Sri M.C. Chaturvedi, Senior Counsel for the defendant-respondent.
3. It would be necessary to state the basic facts giving rise to the suit in question and leading to the passing of the impugned order before adjudging its validity.
4. The dispute in the suit as also in this appeal concerns a piece of land having an area of 3109.58 square meters situate in Kavi Nagar industrial area, Ghaziabad.
5. The plaintiff-appellant was allotted two plots No.D-20 and E-170 adjoining each-other together having an area as mentioned above by the U.P.S.I.D.C. defendant- respondent in the year 1995. On the basis of the aforesaid allotment a registered agreement was executed by the defendant-respondent on 20.10.1995 and the plaintiff-appellant was put in possession of the said land. Subsequently, on the request of the plaintiff-appellant the defendant-respondent vide order dated 02.08.2000 divided the area of the above two plots into three separate plots as under:-
i) plot No.1 area 1186.10 square meters;
ii) plot No.2 area 923.80 square meters; and
iii) plot No.3 area 997.37 square meters
6. Later, on the request of the plaintiff-appellant vide order dated 26.08.2000 the defendant-respondent granted permission to the plaintiff-appellant to construct and run a hotel and a banquet hall over the land of plot No.2 area 923.80 square meters subject to payment of conversion charges of Rs.11,07,900/-.
7. It may be important to note at this stage that the allotment and lease of the aforesaid land was for industrial purposes and therefore, the conversion charges in respect of one of the plots proposed to be used for commercial purposes was demanded and deposited.
8. In the year 2002, the defendant-respondent alleged that the plaintiff-appellant is using the 3rd plot as a farmhouse in violation of the terms of the agreement and therefore, a show cause notice was issued as to why the allotment of plot Nos. 2 and 3 may not be cancelled.
9. In response to the said notice the plaintiff-appellant applied for converting the land use of plot No.3 area 999.37 square meters into commercial. However, the defendant-respondent vide order dated 15.03.2002 cancelled the allotment of plots No. 2 and 3. The said order cancelling the allotment of the aforesaid two plots was challenged by the plaintiff-appellant by filing a writ petition which was disposed of on 09.09.2002 with the direction to the defendant-respondent to take a fresh decision within two months. When the representation of the plaintiff-appellant on the basis of the directions of the High Court was rejected by the defendant-respondent, another writ petition was filed challenging the rejection order which was disposed of on 07.04.2011 with direction for reconsideration of the matter.
10. In pursuance of the above, the defendant-respondent vide order dated 27.11.2012 restored the allotment of plots No. 2 and 3 holding that the order dated 15.03.2002 cancelling the allotment is illegal and accordingly withdrawing the aforesaid order. At the same time, the plaintiff-appellant was advised to apply for converting the land use and to pay the conversion charges.
11. In view of the above order dated 27.11.2012 the cancellation of the two plots came to an end and the order dated 15.03.2002 stood withdrawn.
12. The plaintiff-appellant in order to have plots No.1 and 3 converted into commercial use deposited Rs.32,82,100/- as conversion charges in the light of the order dated 27.11.2012.
13. The defendant-respondent after keeping silent for years together vide letter dated 14.12.2016 required the plaintiff-appellant to deposit Rs.4,36,78,409/- as conversion charges of the land use in respect of plots No. 1 and 3. On the strength of this letter as no amount was deposited, an order was passed on 25.03.2017 cancelling the allotment of plots No. 1 and 3. This action of the defendant-respondent compelled the plaintiff-appellant to institute the present suit for declaring the aforesaid cancellation order dated 25.03.2017 to be illegal, null and void and to restrain the defendant-respondent from realising any conversion charges in respect of the aforesaid two plots and further from allotting any portion of the land in dispute of the original plots No.D-20 and E- 170 to any 3rd party.
14. The written statement of the defendant-respondent on record reveals that the facts as stated above are not factually disputed and the cancellation of the plots has been defended due to non-payment of the conversion charges and it is alleged that the suit has been filed in order to harass the Officers of the defendant-respondent.
15. The court of first instance after narrating the facts of the case, in the end holding that the plaintiff-appellant has failed to make out a prima facie case in its favour as the allotment of the plots No.1 and 3 stands cancelled vide order dated 25.03.2017, refused to grant interim protection to the plaintiff-appellant vide the impugned order.
16. In challenging the impugned order, the submissions of Sri Rishabh Agarwal, learned counsel for the plaintiff- appellant are as under:-
i) The plaintiff-appellant is admittedly in possession of the disputed land since 1995 and are running a hotel and a banquet hall on the second plot since 2000. The validity of the cancellation order dated 25.03.2017 is in dispute, therefore, the plaintiff-appellant has a prima facie case and the court below under mis-conception has recorded a finding otherwise;
ii) a registered lease deed cannot be cancelled or nullified by a mere executive fiat by passing an order of cancellation; and
iii) in the event of breach of any condition of the lease resulting in recovery of any amount, the instrument of transfer has to be saved by giving the transferee an opportunity to make good the shortfall or to pay the amount, in view of the decision reported in (2011) 7 SCC 493 I.T.C. Ltd. Vs. State of U.P. and others.
17. Sri M.C. Chaturvedi, Senior Counsel for the defendant-respondent in response has submitted that the cancellation is on account of non-payment of the demand of conversion charges and that the plaintiff-appellant is a defaulter in this regard, who is not entitle to any interim protection of the court.
18. During the course of the arguments it has also been brought to the notice of the court that pending the appeal, pursuant to the impugned cancellation order not only the plots No. 1 and 3 have been sealed but also the plot No.2 which is not even to subject matter of cancellation.
19. The validity of the cancellation order dated 25.03.2017 is the subject matter adjudicated on trial in the suit. However, from the said order it is evident that it cancels the allotment of plot Nos. 1 and 3 only. The cancellation of the allotment of plot Nos.1 and 3 prima faice does not permit the defendant-respondent to put seal on the 2nd plot.
20. The cancellation order dated 25.03.2017 purports to revive the previous cancellation order dated 15.03.2002 an order which is already been withdrawn and held to be illegal vide order dated 27.11.2012. It cannot be revived by the subsequent order more particularly when the aforesaid order dated 27.11.2012 is final and conclusive.
21. In view of the above, the order dated 25.03.2017 to some extent appears to be incorrect.
22. The aforesaid cancellation order dated 25.03.2017 only directs the plaintiff-appellant to seek conversion of land use of the plots No. 2 and 3 in accordance with the rules but does not specify any rate at which the conversion charges have to be paid. The plaintiff- appellant of its own had deposited Rs.32,82,100/- while applying for the conversion of the land use of the aforesaid plots which was accepted without any protest. In fact there was complete inaction on part of the defendant-respondent for atleast two years during which, it never informed the plaintiff-appellant of any rate of the conversion charges or the amount to be paid for the purpose. Therefore, the demand of Rs.Rs.4,36,78,409/- raised all of a sudden vide letter dated 14.12.2016 is apparently not only unilateral and one sided but is unjustified.
23. The plaintiff-appellant admittedly is running his hotel and the banquet hall on the 2nd plot and is using the other 2 plots eversince 1995. The constructions over the entire land, if any, are not said to have been made by it in any unauthorised manner or without getting the map sanctioned.
24. Therefore, in the facts and circumstances of the case, the court of first instance fell in error in holding that the plaintiff-appellant has no prima facie case. In fact, the plaintiff-appellant is entitle to use of the land until and unless the validity of the cancellation order is adjudicated. Any action of dispossession from the land in dispute or sealing it undoubtedly visits the plaintiff-appellant with civil consequences.
25. The purpose and object of providing land through defendant-respondent is to develop infrastructure for commercial or industrial growth and not to hamper setting up and running of any business on technicalities forcing the entrepreneurs to shut down their existing business.
26. No doubt in fulfilling the above objects it has protect its own interest and has to ensure that the development is in accordance with law and that the breach of any condition is suitably punished by imposition of fine or penalty as may be provided in law but again at the same time the defendant-respondent is not supposed to act in an arbitrary and unfair manner in either imposing such fines or penalties or in raising any demand for the breach of any conditions of the lease.
27. The very fact that the plaintiff-appellant is in possession and is running its business over the disputed land coupled with the fact that that it is not denying payment of the conversion charges and is willing to deposit even the balance amount demanded after adjusting the sum of Rs.32,82,100/- already deposited provided its request for the conversion of land use of plots No. 1 and 3 is also considered sympathetically in accordance with law.
28. Sri M.C. Chaturvedi, Senior Counsel accepts that in case the plaintiff-appellant deposits the conversion charges as demanded within a reasonable time allowed by the court, the defendant-respondent would consider the request appropriately as the purpose is not to harass or cause loss to the plaintiff-appellant.
29. In view of the above facts and circumstances, the dispute in substance is confined to the payment of the above Rs.4,03,96,309/- as conversion charges and to nothing else. The plaintiff-appellant is ready and willing to pay the said amount but in instalments within reasonale time and the defendant-respondent is inclined to accept the same so as to regularise the breach, if any, in the conditions of lease by considering the request for conversion of land use.
30. In view of the aforesaid facts and circumstances, we are of the opinion that the impugned order dated 19.01.2018 is unsustainable. It is accordingly, set aside with the direction to the plaintiff-appellant to deposit (Rs.4,36,78,409-Rs.32,82,100)=Rs.4,03,96,309/- in 4 equal instalments to be paid/deposited on every two months commencing from 1st of June, 2018. The 1st instalment shall be paid/deposited on or before 10th June, 2018, 2nd on or before 10th August, 2018 and so on.
31. On deposit of the 1st instalment the seal of the property would be removed and the plaintiff-appellant would be allowed use the land.
32. The defendant-respondent shall consider the request of the plaintiff-appellant for the change of the land use of the plots No. 1 and 3 in accordance with law most expeditiously if possible within six weeks from today.
33. The payment of the aforesaid entire amount would be subject to the above decision of the defendant- respondent.
34. The Appeal is allowed accordingly.
Order Date :- 29.5.2018 piyush