REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
SPECIAL LEAVE PETITION(C)No.27278 OF 2009
Delhi Development Authority ... Petitioner
Vs.
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Ram Prakash ... Respondent
J U D G M E N T
ALTAMAS KABIR, J.
1. The Delhi Development Authority, hereinafter,
referred to as “DDA” is the petitioner in this
Special Leave Petition, which is directed against
the judgment and order dated 2.5.2008 passed by the
Delhi High Court in L.P.A. No.22 of 2008.
2. The respondent herein, along with his mother
and wife, purchased a property in No.7, Community
Center, East of Kailash, New Delhi, in an open
auction conducted by the DDA on 10.8.1969.
Possession of the plot was made over to the
purchasers on 5th March, 1972, and a lease deed in
respect of the said plot was executed on 5th April,
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1972. In terms of the Lease Deed, the auction
purchasers were required to construct the building
upon the demised plot within two years from the
date of delivery of possession.
3. It appears that on a routine inspection by the
petitioner’s staff on 8th August, 1983, it was
noticed that the respondent was using the basement
of the building for office purposes which was in
contravention of the prescribed usage. A Show-Cause
Notice was issued on the same day calling upon the
respondent to Show-Cause within 10 days as to why
action for cancellation of lease should not be
taken for violation of clause II(13) of the Lease
Deed. The respondent replied to the said Show-
Cause Notice on 10th August, 1983, denying misuse
of the property. No further action was taken on
the said Show-Cause Notice till seven years later
when on 28th June, 1990, another Show-Cause Notice
was issued stating as to why the lease should not
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be determined for violation of clause II(13) of the
Lease Deed on the ground that the basement of the
building was being misused as an office for
Frooti/Atash Industry, instead of storage, and the
mezzanine floor was being used for the office of
M/s Ferrow Alloys Forging & M/s Green Land, instead
of storage.
4. In response to the second Show-Cause Notice the
respondent replied stating that the portion in
question had been leased to the above-named
companies for storage purposes and their failure to
abide by the terms of the lease has been brought to
the notice of the tenants for taking appropriate
steps.
5.Since the reply was not found to be satisfactory,
further Show-Cause Notices were issued to the
respondent on 3.9.1990 and 11.12.1990 in relation
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to the violation of the provisions of the Lease
Deed and to remove the breaches which had been
pointed out, in default whereof the lease would be
determined. The respondents replied to the Show-
Cause Notice dated 3.9.1990 on 5.11.1990 stating
that the tenant was using the basement for storage
of Frooti juices and was not operating any office
therefrom. It was also mentioned that the tenant
in the mezzanine floor had not yet replied to the
notice which had been issued to him.
6.However, on the basis of another inspection of
the premises conducted in December, 1990, where it
was noticed that both the floors were still being
misused, notices were issued for joint inspection
which was fixed for 18.2.1991, 12.3.1991 and
22.4.1991. However, the respondents did not join
the inspection and ultimately an inspection was
carried out on 24.4.1991 and another Show-Cause
Notice was issued to the respondents on 8.5.1991.
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In response to the said Show-Cause Notice the
respondents wrote back on 21.5.1991 that they have
no control over the tenants, except to inform them
of their violations. Ultimately, the respondents
in its letter dated 9.7.1991 stated that the
mezzanine floor was being used as offices. In
reply to the said letter written on behalf of the
respondent the petitioner informed the respondent
that as per architectural design the mezzanine
floor could be used only for storage and unless the
misuse was stopped the lease would have to be
determined. In response on 13.11.1991 the
respondent once again asserted that the mezzanine
floor in the Community Centre was not being
misused.
7.Thereafter, there was a series of correspondence
exchanged on the same subject. In the meanwhile,
Smt. Kamla Ahluwalia, the wife of the respondent,
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died on 23.4.1994, as did Smt. Saraswati Devi on
6.8.1994.
8.On 20.5.2004 the respondent applied to the DDA
for mutation of the property in favour of the legal
heirs of the deceased co-auction purchasers. In
response thereto the respondents were asked by a
letter dated 20.5.2004 to pay misuser charges and
were called upon to clear the dues in respect
thereof. Aggrieved by the said demand notice the
respondents filed a Writ Petition, being W.P.No.
8464 of 2006, in the High Court for quashing the
demand of misuser charges amounting to
Rs.1,78,85,001/-. The same was allowed by the High
Court on 17.8.2007 and the demand of misuser
charges raised by the DDA, by its letter dated
20.5.2004, was quashed.
9.The DDA filed Letters Patent Appeal, being LPA
No.22 of 2008 on 12.12.2007, challenging the order
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of the learned Single Judge dated 17.8.2007, which
was dismissed on 2.5.2008.
10.It is against the said order of dismissal of the
LPA by the Delhi High Court that this Special Leave
Petition has been filed by the DDA.
11. Appearing for the DDA, Mr. A. Sharan, learned
Senior Advocate, submitted that, although, under
the terms of the lease deed, the respondent was
allowed to use the premises for commercial
purposes, he had misused the same and that the
premises was being used for running an office.
Furthermore, a construction had been raised on the
terrace which was unauthorized and in direct
violation of the lease agreement. It was submitted
that the misuser of the property came to the notice
of the DDA during inspection, as such misuser of
the demised premises had been carried on without
notice to and the leave of the DDA. Mr. Sharan
also submitted that as many as 14 Show-Cause
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Notices had to be issued to the respondent on
account of such misuser. Since the respondent
failed to comply with the requisitions contained in
the said notices, the DDA issued a notice for
Rs.1,78,85,001/-, on account of misuser charges
against which the respondent filed a writ petition,
being W.P.(C)No.8464 of 2006, which was allowed by
the learned Single Judge and the demand of misuser
charges raised by the petitioner by its letter
dated 20th May, 2004, was quashed.
12. The DDA filed Letters Patent Appeal No.22 of
2008 against the said order of the learned Single
Judge before the Division Bench which dismissed the
same on the ground that while according to the
petitioner-Authority, a portion of the premises was
being used for office premises, according to the
respondent the said portion of the premises was
being used only to store computers. There was no
office as such, but a small establishment was
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maintained by the tenant for accounting purposes of
the goods brought to the premises for storage
purposes only. It was not as if a regular office
was being run from the said premises.
13. As far as the other part of alleged misuse
relating to construction raised on the terrace of
the premises is concerned, it was stated on behalf
of the respondent that such construction had been
raised by the tenant without obtaining the sanction
of the lessee and consequently, the respondent had
initiated action against the said tenants for their
eviction therefrom.
14. What also weighed with the Judge is the fact
that the first Show-Cause Notice issued to the
petitioner was in regard to alleged misuse of the
basement from 30th July, 1983, the mezzanine floor
from 20th June, 1990, and the terrace from 7th
September, 1992, till 13th January, 2003. However,
although, the first Show-Cause Notice was issued to
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the respondent on 8th August, 1983, regarding
misuse of the basement and a reply was also
submitted by the respondent on 10th August, 1983,
no decision was taken by the DDA on the said Show-
Cause Notice. On the other hand, in June 1990,
upon an alleged inspection by the DDA, another
Show-Cause Notice was issued to the respondent on
28th June, 1990, only in respect of the alleged
misuse of the basement and the mezzanine floor.
Despite a reply being sent, again no action was
taken by the DDA except for issuing Final Notices
to the respondent on 3rd September, 1990 and 11th
December, 1990, requiring him to stop violation of
the conditions of the lease deed, failing which it
would be terminated. The respondent sent a reply
to the first Final Notice on 5th November, 1990,
but again no decision was taken on any of the two
Final Notices which had been sent to the
respondent. Periodical inspection was thereafter
carried out, but no action was at all taken by the
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DDA and its authorities against the respondent for
alleged misuse of the premises in question.
15. Ultimately, on a question of limitation being
raised in respect of the demand of misuser charges,
the Division Bench observed that where no period of
limitation is prescribed, action has to be taken by
the authorities within a reasonable period of time,
but by no stretch of imagination, could it be said
that after a lapse of almost 25 years that the DDA
had not acted arbitrarily or at least unfairly in
so far as the respondent is concerned. In
addition, the respondent was never informed by the
DDA that he was required to pay any misuser
charges. On the basis of such reasoning, the
Division Bench of the High Court dismissed the
appeal and upheld the order of the learned Single
Judge.
16. Mr. Sharan submitted that both the learned
Single Judge and the Division Bench had
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misconstrued the principles relating to limitation
in holding that the DDA had acted arbitrarily and
unfairly in so far as the respondent was concerned,
and, in any event, the respondent was never
informed by the DDA that he was required to pay
misuse charges.
17. Mr. Sharan urged that both the Single Judge and
the Division Bench of the High Court failed to
consider the core issue relating to the user of the
premises in keeping with paragraph 13 of the lease
deed executed by the DDA in favour of the
respondent on 5th April, 1972. In this regard Mr.
Sharan referred to paragraph 13 of the lease deed
which reads as follows :
“13) The lessee shall not without
the written consent of the lessor carry
on or permit to be carried on, on the
plot or in any building thereon any
trade or business of manufacture which
in opinion of the lessor may be noisy,
noxious or offensive or the same or
permit the same to be used for any
purpose other than those specified or do
or suffer to be done therein any act or
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thing whatsoever which in the opinion of
the lessor may be a nuisance annoyance
or disturbance to the lessor or the
person living in the neighbourhood.
Provided that, if the lessee is desirous
of using the said plot or the building
thereon for a purpose other than those
specified the lessor may allow such
change or user on such terms and
conditions including payment of
additional premium and additional rent,
as the lessor may in his absolute
discretion determine.”
18. Mr. Sharan submitted that having regard to the
above, the respondent was not entitled to use the
demised premises in a manner which was contrary to
paragraph 13 of the lease deed. It was contended
that the respondent was carrying on a business in
the demised premises in respect whereof there was
no feed back whatsoever from the lessee. Mr.
Sharan urged that the order of the learned Single
Judge dated 17th August, 2007, could not be
sustained and the same was liable to be set aside,
along with the order of the Division Bench impugned
in the Special Leave Petition.
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19. Appearing in person, the respondent, on the
other hand, submitted that after the Show-Cause
Notices were issued no action whatsoever was taken
on the basis thereof and all of a sudden the
exorbitant misuser charges, amounting to
Rs.1,78,85,001/- was demanded from him. Professor
Ram Prakash submitted that from 1983, nothing had
been done by the DDA on the basis of the Show-Cause
Notices which had been issued, to which the
respondent had promptly replied stating that the
construction on the terrace had been effected by
the tenants and not by him and in respect whereof
proper proceedings had been initiated for their
eviction from the premises. The respondent
submitted that it is only under severe compulsion,
that he had to move the Writ Court for relief in
relation to the demand of misuser charges of
Rs.1,78,85,001/-. The respondent submitted that
for the last 25 years he had been made to face
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various problems and uncertainties, but that it was
entirely unjustified on the part of the DDA to
raise the claim of alleged misuser charges of
Rs.1,78,85,001/-. The respondent submitted that
after a long period of 25 years, a quietus was
required to be given to the matter.
20. The respondent submitted that after issuance of
Show-Cause Notices, the DDA should have taken
further steps in the matter within a reasonable
time and that too relating to misuser chargers
where he was not at fault. The respondent
submitted that he had taken prompt steps not only
to reply to the Show-Cause Notices issued to him,
but to initiate action against the tenants who had
used the property in a manner which was different
from the purpose for which the property had been
let out. The respondent submitted that this was a
case where both the learned Single Judge and the
Division Bench decided the matter in the crucible
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of events peculiar to the facts of this case,
having particular regard to the length of the
period for which the misuser charges had been
demanded.
21. Having considered the submissions made on
behalf of the DDA and by the respondent appearing
in-person, and also having considered the reasoning
of the learned Single Judge and the Division Bench
in repudiating the claim of misuser charges by the
DDA, we are unable to convince ourselves that the
decisions rendered by the High Court, both by the
learned Single Judge as also the Division Bench,
require any interference in these proceedings. The
materials on record will show that the respondent
took prompt steps against the tenants for their
transgression. During arguments it was indicated
that, in fact, one of the tenants had already
vacated the portion of the premises occupied by
him. It is also very clear that after issuing the
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Show-Cause Notices, the petitioner did not take any
follow-up action thereupon. Instead, after a lapse
of 25 years, the petitioner set up a claim on
account of charges for the entire period. It would
be inequitable to allow the petitioner which had
sat over the matter to take advantage of its
inaction in claiming misuser charges.
22. Even as to the contention raised on behalf of
the petitioner that there was no limitation
prescribed for making a demand of arrear charges,
the Division Bench relying on the decision of this
Court in State of Punjab & Ors. Vs. Bhatinda
District Cooperative Milk Producers Union Ltd.
[(2007) 11 SCC 363], observed that even where no
period of limitation is indicated, the statutory
Authority is required to act within a reasonable
time. In our view, what would construe a
reasonable time, depends on the facts and
circumstances of each case, but it would not be
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fair to the respondent if such demand is allowed to
be raised after 25 years, on account of the
inaction of the petitioner.
23. We do not, therefore, find any reason to
interfere with the judgment either of the learned
Single Judge or of the Division Bench of the High
Court and the Special Leave Petition is,
accordingly, dismissed.
24. There will, however, be no order as to costs.
…………………………………………J.
(ALTAMAS KABIR)
…………………………………………J.
(CYRIAC JOSEPH)
New Delhi
Dated: 15.03.2011