Civil Writ Petition No. 12796 of 2008 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Writ Petition No. 12796 of 2008 Date of decision: 7.04.2011 Mrs. Neera Goyal .....Petitioner VERSUS Chandigarh Administration & others ....Respondents CORAM:- HON'BLE MR.JUSTICE RANJIT SINGH PRESENT: Mr. Arun Jain, Sr. Advocate with Mr. Amit Jain, Advocate. Mr.Rajiv Atma Ram, Senior Advocate with Mr.Saurab Arora, Advocate. Mr. Arun Palli, Sr.Advocate with Mr. Jai Bhagwan, Advocate. Mr.Puneet Bali, Advocate. Mr.Ashwani Talwar, Advocate. Mr.J.S.Sidhu, Advocate. Mr.Sanjay Kaushal, Sr.Standing Counsel with Mr. Sanjeev Ghai, Advocate, for Chandigarh Administration. Mr.Vishal Sodhi, Advocate. Mr.Harkesh Manuja, Advocate. Ms.Lisa Gill, Advocate. Mr.S.S.Patter, DAG, Haryana. Mr. K. K. Gupta, Advocate, for Chandigarh Housing Board. **** RANJIT SINGH, J. This order will dispose of CWP No.12796 of 2008 (Neera Goyal Versus Chandigarh Administration & others), CWP Civil Writ Petition No. 12796 of 2008 -2- No.12775 of 2008 (Tejinder Singh Rihal Versus Chandigarh Administration & others), CWP No.12776 of 2008 (Brig.Balbir Singh Versus Chandigarh Administration & others), CWP No.12777 of 2008 (M/s Supreme Motors Ltd. Versus Chandigarh Administration & others), CWP No.12778 of 2008 (Gurcharan Singh Versus Chandigarh Administration & others), CWP No.12779 of 2008 (Metro City Estates Pvt. Ltd. Versus Chandigarh Administration & others), CWP No.12797 of 2008 (M/s Northland Engineering Industries Versus Chandigarh Administration & others), CWP No.12798 of 2008 (M/s Deeson Engineers Versus Chandigarh Administration & others), CWP No.12799 of 2008 (Ashwani Automobiles. Versus Chandigarh Administration & others), CWP No.12800 of 2008 (M/s K&G Trading Co. Versus Chandigarh Administration & others), CWP No.12801 of 2008 (M/s Chandigarh Flour Mills Pvt. Ltd. Versus Chandigarh Administration & others), CWP No.12802 of 2008 (Nitin Mehan & others Versus Chandigarh Administration & others), CWP No.12803 of 2008 (Rajesh Kumar & another Versus Chandigarh Administration & others), CWP No.12811 of 2008 (M/s Bhushan Power and Steel Ltd. Versus Chandigarh Administration & others), CWP No.12832 of 2008 (M/s Essen Deiniki Versus Chandigarh Administration & others), CWP No.12833 of 2008 (Pawan Manchanda. Versus Chandigarh Administration & others), CWP No.12834 of 2008 (M/s Khandelia Oil and Gen. Mills Pvt. Ltd. Versus Chandigarh Administration & others), CWP No.12838 of 2008 (M/s Bhushan Power and Steel Ltd. Versus Chandigarh Administration & others), CWP No.12846 of 2008 (Anil Kumar Versus Chandigarh Administration & others), CWP No.12865 of 2008 (Vishnu Associates Civil Writ Petition No. 12796 of 2008 -3- Pvt. Ltd. Versus Chandigarh Administration & others), CWP No.14137 of 2008 (M/s Dee Kay Trading Co. Versus Chandigarh Administration & others), CWP No.14147 of 2008 (Vijay Laxmi Versus Chandigarh Administration & others), CWP No.14166 of 2008 (H.L. Vij Versus Chandigarh Administration & others), CWP No.14171 of 2008 (K.V. Laboratories Ltd. Versus Chandigarh Administration & others), CWP No.14176 of 2008 (Urmila Goel Versus Chandigarh Administration & others), CWP No.14189 of 2008 (RSA Motor Pvt. Ltd. Versus Chandigarh Administration & others), CWP No.14190 of 2008 (M/s Jagan Realtors Pvt. Ltd. Versus Chandigarh Administration & others), CWP No.14220 of 2008 (Bharat Bhushan Versus Chandigarh Administration & others), CWP No.14312 of 2008 (Amarbir Singh Versus Chandigarh Administration & others), CWP No.14313 of 2008 (M/s Alchemist Reality Ltd. Versus Chandigarh Administration & others), CWP No.14316 of 2008 (HL Vij Versus Chandigarh Administration & others),CWP No.14325 of 2008 (M/s Hindustan Garage Versus Chandigarh Administration & others), CWP No.14407 of 2008 (Giltron Industries Ltd. Versus Chandigarh Administration & others), CWP No.14629 of 2008 (Harish Goyal & another Versus Chandigarh Administration & others), CWP No.14630 of 2008 (Pankaj Gupta Versus Chandigarh Administration & others), CWP No.14631 of 2008 (Parvinder Singh & others Versus Chandigarh Administration & others), CWP No.3989 of 2008 (Laghu Udyog Bharti & others Versus Union Territory, Chandigarh & others), CWP No.15373 of 2008 (Cedar Hospitality Ltd. Versus Chandigarh Administration & others), CWP No.15377 of 2008 (M/s Parkash Handloom Ind. Vs. Chandigarh Administration & others), CWP Civil Writ Petition No. 12796 of 2008 -4- No.15411 of 2008 (M/s Sona Arcades Pvt. Ltd. Versus Chandigarh Administration & others), CWP No.16279 of 2008 (M/s Surya Narow Fabrics Versus Union Territory, Chandigarh & others), CWP No.16118 of 2008 (M/s P.N. Weaving Versus Chandigarh Administration & others), CWP No.19118 of 2009 (M/s Chandigarh Spun Pipe Co. Versus Union Territory, Chandigarh & others). Number of petitioners through these writ petitions have approached this court to challenge the action of the respondent- Union Territory, Chandigarh in enhancing the conversion fees of industrial plots to that of commercial. The facts have been taken from CWP No.12796 of 2008, though number of counsel made submissions in these different writ petitions. Respondent-Chandigarh Administration had notified a scheme called “Chandigarh Conversion of Land Use of Industrial Sites into Commercial Activity/Services in the Industrial area, Phase- 1 and Phase-II, Chandigarh Scheme, 2005” (hereinafter referred to “Scheme 2005”). This scheme has been prepared in exercise of powers conferred by Section 7 read with Section 22 of the Capital of Punjab (Development and Regulation) Act, 1952. The scheme, which was notified w.e.f. 11.7.2005, made a provision for conversion of land use for industrial area to commercial site on a conversion fees to be paid at the rate of Rs.20,000/- per square yard. The scheme was to remain in operation for a period of two years and was, thus, to end on 18.9.2007. The formula for calculating the conversion fees was contained in Clause 6 of the scheme notified on 19.9.2005, which inter-alia provided “that the conversion fee to be paid by the applicant who applies for conversion will be 50% of the average price of Civil Writ Petition No. 12796 of 2008 -5- commercial sites fetched in auctions held in the last 3 years”. Average price on the basis of last three years auction of commercial sites sold by the Estate Office was annexed as Annexure-C with the notification. 10% concession was extended to those applicants who applied for conversion within one year of the notification of the scheme. The scheme which was initially notified on 11.7.2005 was amended on 19.9.2005 and accordingly the fixed conversion fees came out to be Rs.20,000/- per square yard. The scheme was partly amended on 7.6.2006 but the conversion fees remained the same. It is stated that the response to the scheme was lukewarm initially. During the year 2007, respondents receives some applications for conversion. Because of the high rate of conversion, there statedly was resentment in the industry. Even there was some complication faced in implementation of the scheme due to lack of coordination in various quarters. Joint forum of industries, therefore, represented before the Chandigarh Administration for extension of the scheme for two more years on the same rate and the same terms and conditions. The matter was examined by the Chandigarh Administration and after due deliberation the scheme was extended by another six months i.e. upto 18.3.2008 on the same terms and conditions. Reference is made to the proposal framed by Finance Secretary dated 14.9.2007, who found some substance in the representation this being a first time that this initiative was undertaken. The Finance Secretary, however, found two years period far too long but recommended extending of the scheme for another Civil Writ Petition No. 12796 of 2008 -6- six months on the same terms and conditions. The Administrator thereafter felt that six months period for extending the scheme was adequate and his view in this regard are as under:- “I feel six months is adequate. Simultaneously, please examine the cases of those who do not plan to convert and choose to retain existing plots as a speculation. Please ensure the appropriate laws are implemented in three months.” The scheme accordingly was extended by issuing a notification on 18.9.2007. Perusal thereof would show that the scheme was extended for a period of six months i.e. upto 18.3.2008 on the same terms and conditions. The schemes notified earlier and annexed with the petition as Annexures P-1 and P-2 were extended upto 18.3.2008. The petitioners applied in the manner prescribed for conversion of a plot in industrial area Phase-I within the extended period on the basis of conversion fees as already fixed by Chandigarh Administration. The petitioner had deposited a demand draft of Rs.20,51,100/- on 14.3.2008 being the first instalment. The respondents thereafter accepted various applications and started processing the same. Despite this, the petitioner received a communication on 28.3.2008 informing him that his application was pending for awaiting decision for finalisation of conversion fees. The petitioner objected to the approach adopted by the respondent- Chandigarh Administration and pleaded that conversion scheme was notified on 19.9.2005 and conversion fees was fixed at Rs.20,000/- per square yard which stood extended till 18.3.2008 and once the Civil Writ Petition No. 12796 of 2008 -7- respondents have accepted the applications, their action in reconsidering the conversion fees would be illegal, arbitrary, malafide and violative of Articles and 14 and 19(1)(g) of the Constitution. On 14.7.2008, the Chandigarh Administration has taken a decision that the applications, which were received complete in all respects before 17.12.2007 and remained undecided, would be allowed conversion at the rate as applicable on 17.12.2007 and thereafter conversion rate shall be calculated by taking into consideration all auctions of last three years. Grievance of the petitioner, therefore, is that the conversion rates have been retrospectively enhanced, though the scheme was extended on the same terms and conditions and, thus, this action of the respondents would be illegal and arbitrary. In the meanwhile, the scheme was further extended for a period of another six months from 18.3.2008 to 18.9.2008. The facts pleaded as can be culled out from another writ petitions would show that the scheme was extended upto 18.3.2008 on the same terms and conditions and copy of this notification is Annexure P-5. As already noticed, the respondents accepted various applications on the same conversion fees. Further extension of the scheme was notified on 18.3.2008. It then transpired that the fresh scheme was being framed on enhanced rates of conversion fees. The petitioners, however, were to learn to their dismay that the scheme after modification meant that respondents were going to charge excess conversion fees even from the applicants, who had applied between the period from 19.9.2007 to 18.3.2008. This was being so done on account of the auction which was held on Civil Writ Petition No. 12796 of 2008 -8- 18.12.2007 where the auction prices have considerably increased. Petitioner thereafter received communication dated 31.3.2008 that their applications have been kept pending for the purpose of finalisation of conversion fees. The petitioner obviously objected and sought conversion at the same rates of Rs.20,000/- per square yard. The respondent-Union Territory have now passed an order on 14.7.2008 to the effect that the applications which were received complete in all respects on 14.7.2007 and remained undecided would be allowed conversion at the rate as applicable on 17.12.2007 and thereafter w.e.f. 18.12.2007 the conversion rates shall be calculated by taking into consideration all auctions of last three years. The grievance of the petitioners is that by virtue of this order, the conversion rate has been retrospectively changed, though the scheme was extended on the same terms and conditions. They have accordingly filed all these petitions before this court. The respondents in their reply would justify the action and would urge that the scheme was initially introduced for a period of two years and was to expire on 18.9.2007. The counsel for the Union Territory would term the petitioners, who never applied for conversion upto 18.9.2007 to be fence sitter. It is, however, not denied that the scheme was then extended by another six months upto 18.3.2008 on the same terms and conditions. This was on the basis of representation received from the owners of industrial plots. The scheme was yet again extended for another six months upto 18.9.2008 on same terms and conditions. As per the respondents, clarification was issued to favour the persons, like petitioner as otherwise they could be asked to pay a sum for conversion which Civil Writ Petition No. 12796 of 2008 -9- was highly excessive and exorbitant and thus there was need to issue clarification in the form of Annexure P-14. It is stated that if the original scheme had been implemented then the rate for conversion would have gone rather high because of the auction which was held on 17.12.2007 and it was so clarified that the conversion fees on application received after 18.12.2007 shall be calculated by taking into consideration all the last three years auctions and the years in which no auction took place are not to be counted while calculating the period of three years. It is stated that if the original scheme had continued, then the petitioners would have been required to pay the conversion fees practically only on the basis of one auction, which would have worked out to be exorbitant. It is accordingly stated that Annexure P-14 clarification was to help the petitioners and such like persons and which cannot be faulted. On the other hand, the counsel for the petitioner would contest this position and would say that Annexure P- 14 is only an office order which cannot amend the notification which was issued. Plea is that the office order cannot overtake the statutory scheme. It is also pleaded by the counsel that the accrued rights cannot be taken away and in this regard support is sought from Ex- Capt.K.C.Arora and another Vs. State of Haryana and others, 1984 (2) SLR 97 and State of Guiarat and another Vs. Raman Lal keshav Lal Soni and others, (1983) 2 SCC 33. Reference is also made to Uday Pratap Singh and others Vs. The State of Bihar, JT 1994(6) SC 344 to urge that by executive fiat no retrospective appointments can be given so as to destroy the seniority. The view that I am going to take would not require of me Civil Writ Petition No. 12796 of 2008 -10- to go into the details of the legal position annunciated in regard to retrospective operation of the notification or that whether there were some accrued rights available to the petitioners which cannot be taken away. Counsel appearing in various cases have made some different submissions which are based on the facts in each case. Some simply made submission that they had filed an application while the extended scheme was in operation and hence enhanced rate could not be charged from them. Some of the counsel were to plead that they had already deposited the conversion fees which was accepted and, thus, now cannot be asked to pay an extended fees. All these issues may not require detailed examination. The scheme when examined would show that the conversion fees was to be calculated as per para 6(ii) of the scheme (Annexure P-1). Though the scheme was partly amended, but the mode of calculating the conversion fees continued to be the same. The conversion fees payable by those who applied for conversion was to be 50% of the average price of commercial site fetched in auction held in the last three years. The fees was further to be reduced by 50% in view of the location disadvantage of the site in industrial area Phase 1 and Phase-II. Another 10% concession was to be extended to those applicants, who applied for conversion within one year of the notification of the scheme. The crux of the issue, thus, was that the conversion fees was to be charged on the basis of average price of commercial sites fetched in auction held in the last three years. As already noted, Annexure -C was annexed with the notification, which contained average price on the basis of last three years auction and on that basis, the conversion fees worked out to Civil Writ Petition No. 12796 of 2008 -11- be Rs.20,000/- per square yard. The method of calculation of conversion fees, thus, was last three years auction. The crucial issue, in my view, is to determine as to how the period of three years is required to be calculated. Mr.Kaushal appearing for the Union Territory would plead that the three years period is to be counted from the date of application, whereas the counsel for the petitioners would plead that three years period would be countable from the date of the notification. I cannot persuade myself to subscribe to the view that last three years would have to be calculated from the date of application. Date of application has no relevance once same scheme is to operate for a particular period as given in the notification. This period would have to be from the date of notification. If the submission as advanced by the counsel for the Union Territory is accepted, this may lead to discrimination amongst similarly situated persons only on the basis of a date of application submitted by them, though the same scheme was applicable and continued for a period of two years. Annexure-C would further clearly reveal that three years were calculated from the date of notification while assessing the conversion fees rates. The notification was issued on 19.9.2005 and the auction which were held in the year 2004, 2003 and 2002 have been taken into consideration to arrive at the conversion fees rate. No prominence is given to the date of application which could be submitted any time during the period of two years. This scheme was extended on the same terms and conditions for a period of six months on 18.9.2007. The scheme was extended on the same terms and conditions. These aspects of calculating the conversion fees Civil Writ Petition No. 12796 of 2008 -12- charges were concerned, it would mean that those who applied for conversion under this extended scheme were to pay the conversion charges at 50% of the average price of the commercial sites fetched in auction held in the last three years. Annexure P-1, in my view, would clearly mean that the scheme was extended on the same terms and conditions, which cannot lead to a position that the same rates of auctions were required to be charged as was in the original scheme. Same terms and conditions only mean that 50% of the average price of the commercial sites fetched in auction in the last three years. It would not mean that the date in the original notification would be relevant for extended notification as well. This has to be from the date of notification vide which the scheme was extended. Thus, to calculate the conversion fees, the auction held in the last three years from 2007 will have to be taken into account and not that the auctions which were relevant for determining the conversion fees on the basis of notification dated 18.9.2007. This scheme was further extended for another period of six months on 18.3.2008. As per this extended notification, the conversion charges would have to be calculated from the date of notification. Thus, the auctions which were held within three years, i.e., 2007, 2006 and 2005 would have to be taken into account while calculating the conversion fees. It would not be fair to hold that extending of the scheme would mean that conversion charges for three years are to be on the basis of original scheme as formulated. The officials of the administration were conscious of this fact that the extending of the policy for a long period would run the risk of making it an open ended and a speculated delay in converting, while the conversion fees shall Civil Writ Petition No. 12796 of 2008 -13- remain statistic. Accordingly, the Advisor had recommended extending of a scheme for a period of three to six months. The Advisor was also of the view that the administration may bind itself not to grant any further extension of this policy. It appears that the administration had extended this scheme on the same terms and conditions which meant that conversion fees was to remain the same. The rights of those persons who had submitted their applications after the scheme was extended have to be determined on the basis of fresh notification. The terms and conditions continued to be the same and since here we are only concerned with the manner calculating conversion fees, it would mean that three years are to be calculated from the date of fresh notifications as and when issued. Submission of applications within the period the scheme is in existence would not make any difference while calculating the conversion fees. Viewed in this light, it cannot be said that any accrued right has been taken away while extending the notification or that the rates are being changed with any retrospective effect. In fact, what it means is the interpretation of the notification. Three years, in my view, would have to be calculated from the date of notification whether it be a notification through which the extension of the period was granted. The action of the respondents in taking into consideration the auction which was held on 17.12.2007, thus, would be open to be taken into consideration so far as last notification extending the period from 18.3.2008 is concerned. The action of the respondents in charging the conversion fees from those applicants whose applications remained undecided till 17.12.2007 would not sound fair. It is the date of notification which would be material and Civil Writ Petition No. 12796 of 2008 -14- not the date of decision on the applications which are submitted. Last three auctions would have to be counted from the date of notification and not from any auction that may have been held. If the auction which was held on 17.12.2007 falls within the purview of three years period from the date of notification, then this would certainly be open to be taken into consideration. The writ petitions are accordingly disposed of in the light of the observations made above. The conversion fees payable would be calculated on the basis of auctions held during the last three years from the date of respective notifications and not that all who had made applications irrespective of the date would have to be charged the same conversion fees. April 07, 2011 (RANJIT SINGH ) ramesh JUDGE