5 $- * IN THE HIGH COURT OF DELHI AT NEW DELHI w.P.(o 763212010 & CM 19839/2010 VINOD KUMAR ..... Petitioner Through: Mr. Girish Aggarwal with Ms. Mugdha Pandey, Advocate. VETSLIS TIIE COMMISSIONER OF INDUSTzuES & ORS..... Respondents Through: Ms. Anusuya Salwan with Ms. Renuka Arora and Ms. Neha Mittal, Advocates for R-2 & 3IDSIIDC. None for R-1. CORAM: JUSTICE S. MURALIDHAR ORDER 14.L2.2010 1. A detailed order has been passed today in W.P.(C) No. 7I4I of 2010 Q,{urender Kumor v. DSIIDQ and batch, including the present writ petition. The Registry is directed to place on the record of this petition a certified copy of the order. 2. The writ petition and the pending application stand disrnissed in terms of the said order. DECEMBER 14,20t0 akg S. MURALIDHAR. J. Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified ) I r '{ J .\ e>" INTHEHIGHCOURToFDELHIATNEwDELHI #60-66 NARIINDER KUMAR AND ORS ..... Petitioners Through: Mr. T.A ' Francis and Mr. Mahesh KatYaYen, Advocates ' . versus DELHI STATE INDUSTRIAL AND INFRASTUCTURE DEVELOPMENT CORPORATION LTD.AND ANR Respondents Through: Ms. AnusuYa Salwan with Ms. Renuka Arora and Ms. Neha Mittal, Advocates for R 'I/DSIIDC. Ms. Megha Bharara for Ms. Ruchi Sindhwani, Advocate for R-2IGNCTD. w.P.(o 763212010 & cM L9839/2010 Through: Mr. Girish Aggarwal with Ms. Mugdha PandeY, Advocate ' versus THE COMMISSIONER OF INDUSTRIES & ORS..... Responderrts Through: Ms. AnusuYa Salwan with Ms. Renuka Arora and Ms. Neha Mittal, Advocates for R-2 & 3/DSIIDC. None for R-1/- w.P.(o 776812010 & cM 20139/2010 BAWANAII,BI-IORGARI{INDUSTIUAI,RELOCATION PLOT OWNER 'S ASSOCIATION TFIR ITS PRESIDENT KAPIL KUMAR ."" PEtitiONET Through: Mr. Prasoon I(umar with Mr. Ravi ChoudharY, Ms. I(anchan Bala ald Mr. DeePak Chander Pal, Advocates ' . versus GOVT OIr NCT & ORS ..... Itespondents Through: Mr. Nawal Ifishore Jha, Advocate for R-1/GNCI 'D. Ms. AnusuYa Salwan with W.P.(C) Nos. 7747 of 2010 batch Page L of 77 \ 1 Ms. Itenuka Arora and Ms. Neha Mittal, Advocates for R-2IDSIIDC. w.P.(o 8086/2010 & CM 20848/2010 PVC COMPOUND & FOOTWEAR MANUFACTURERS ASSOCIATION (REGD) .... Petitioner Through: Mr. Susheel Bharliya and Mr ' Pranar ', Advocates for l&. Sunil Goel, Advocate versus DSIIDC LTD & ORS "" ' ResPondents Through: Ms. AnusuYa Salwan with Ms. Renuka Arora and Ms. Neha Mittal, Advocates for R-I/DSIIDC. Mr. L.K. Garg, Advocat 'e for R-2 & 3/GNCTD. w.P.(o 8097/2010 & cM 20864/2010 BFIARDWAJ PACKAGING INDUSTzuES & ORS . .... P"i 'iONETS Through: Mr. Anupam Srivastava with Mr. Ritesh Thusu, Advocate VETSUS DELHI STATE INDUSTRIAL & INFRASTRUCTURE DEVELOPMENT CORPORATION LIMITED & ANR ..... Respondents Through: Ms. AnusuYa Salwan with Ms. Renuka Arora and Ms. Neha Mittal, Advocates for R 'I/DSIIDC. Mr. Arnitabh Marwah, Advocate for R-2/GNCTD. . W.p.(ct srgslzoro 8, clu zrir+lzoro BAWANA FACTORIES WELFARE AS SOCIATION REGD & ANR "" ' Petitioners Through: Mr. Rajan K. Chourasia with Mr. Rakesh I(umar, Advocate. VETSUS GOVT OF NCT OF DELFII & ORS ..... Respoudent Through: 1\4r. L.K. Gatg, Advocate for R-1 & 2/GNCTD. Ms. Anusuya Salwan with w.P.(C) Nos. 7747 of 2070 hatch :\_j Page 2 of 77 a Ms. Renuka Arora and Ms. Neha Mittal, Advocates for R-3/DSIIDC. w.P.(o 8230/20L0 & cM 21184/2010 RAJNI & ORS '.... Petitioners Through: I\&. Varun Mehlawat, Advocate. vel 'sus GOVT OF NCT OF DELHI & ORS ..., ' Respondents Through: Ms. Megha Bhalara for Ms ' Ruchi Sindhwani, Advocate for R- 1 /GNCTD. Ms. Anusuya Salwan with Ms. Renuka Arora and Ms. Neha Mittal, Advocates for R-2/DSIIDC. CORAM: JUSTICE S. MURALIDHAR 1. Whether Reporters of local papers may be allowed to see the judgment? X ' 2. 'lobe referred to the Reporter or not? / ' ,/ 3. Whether the judgment should be repofted in Digest? v ORDER 14.12.2010 1. This is the second batch of writ petitions challenging the dernand raised by the Delhi State Industrial &. Infiastructure Development Corporation Ltd. ( 'DSIIDC ') requiring the Petitioners to deposit the cost of the plots allotted to thern ad-measuring 100 sq. m ' in Sector I(, Bawana-Il at Bhorgath @Rs ' 15,5661- per sq ' m ' Z. The earlier writ petitions were dismissecl by this Coutt on 26 ' ' ' October 2Ot0 lw.P.(c) 7143 of 2010 - Mohd Jaan v. ' DSIIDQ. I-Iowever ', ' counsel for the Petitioners in this batch have stated that some of the groulds that they wish to urge were not considered by this Coutl ou the W.P.(c) Nos. 7L4L of 2070 batch Page 3 of 77 1 earlier occasion. 3. It is first submitted that the cost of Rs. 15,5661- per sq. m. as indicated in the demand letter dated 17th September 2OI0 shows that a sum of Rs. 4,259.10 per sq. m. is on account of 50o/o of gross cost added as per the govemment policy for light industry, for cross-subsidy towards categories such as housing for economically weaker sections ( 'EWS ')- It is submitted that the Petitioners are themselves displaced persons inasmuch as tlrey wdre earlier running industrial units prior to 19tl ' April 1996 in non-confolning areas and were being rehabilitated pursuant to a relocation scheme. tl.t could not be expected to bear the cost of cross- subsidy towards categories such as the EWS ' 4. Secondly, it is subrnitted that this element of the cost was nevet communicated to the Petitioners either when the applications were inviteci in 1996 or even when the allotments were made rn 2006. 'fhe omnibus clause in the allotment letter stating that the cost was 'tentative ' could not be open-ended. According to the Petitioners, this did not perrnit the DSIIDC to add an element of cost which was not originally envisaged while indicating the tentative cost to each of thern. Reliance is placed on tlre decision of a Full Bench of this Courl in P-1\/. Vermu v. Urtion cf Incliu AIR 1985 Delhi 417, which was upheld by the supreme couft, and tlre decision of the Suprerne Courl in Delhi Developntent Authorit-y"r '. Joint Action conmrittee, Allottee of sFS Ftats AIR 2008 ,sc 1343.It is . '; W.P.(C) Nos. 774L of 2070 batch Page 4 of L7 V a further submitted that the stand of the Respondent DSIIDC that they were rnerely abiding by the policy of the Governml,tr of National Capital .feritory of Delhi ( 'GNCTD ') and had no choice in the matter, was not a satisfactory explanation. It is pointed out that neither in the Bawana-I Scheme, nor in the Narela Scheme, was any element of cross-subsidy towards EWS housing sought 'to be added.to the cost of the industrial plots. Referring to ceftain observationg of a Division Bench of this Couft in DSIIDC v. Yushpal Madan 148 (2005) DLT 642 (DB), it is pointed out that even where the cost of the plots in Narela was determined at R-s. 24,000/- per sq. tn., the EWS cross-subsidy .was not sought to be recovered from those plot-holders. 5. Thirdly, it is submitted that there were around 23,000 persons who faced displacement on account of their running units in non-confbrrning areas prior to 19tl ' April 1996. Nearly 19,000 were allotted alternative plots in different areas including Bawana-I and Narela. They were not charged any component of cross-subsidy towards EWS housing. It is, therefore, submitted that the Petitioners, belon$ing to the safile class, cannot be discrirninated against and be made to pay towards cross-subsidy for the EWS housing. It is submitted that while the Petitioners a.re prepared to pay the cost as indicated in the first demand raised in 2006" the present cost of Rs. 15,5661- per sq. ut. was double the said cost and was clearly arbitrary and exorbitant. Even if they were extended assistance with loans from the Delhi Financial Corporation ( 'DFC ') asd W.P.(C) Nos. 7747 of 2070 batch Page 5 of 77 t\ p.*.r hnancial institutions, the financial burden would be too heavy them. 6. In another set of petitions, it was subrnitted that charging Rs. 1000f per sq. m. towards O & M cost (Corpus Fund) was also albitrary .anci unreasonable. In an earlier communication in response to an applicaticil filed under the Right to Information Act,2005 ( 'RTI Act ') the Respondent DSIIDC maintained that they were charging 2.5o/o of the land value towards annual maintenance apart from charging 25% towards the annual ground rent. This would arnount to charging twice for maintenance. Tirq Petitioners have also questioned the charging by the DSIIDC of interest fi 'om them at 18% per annum for the delayed payment while paying to thern interest only at IOo/o per annurn for the amounts already deposited.by them with the DSIIDC. It is further pointed out that the interest was being paid only for the period 1" April 2OO9 to 31 't March 20Il whereas the amounts were deposited from 1996 onwards. In this connection, reliance has been placed on the judgment of the Suprerne Court in Videocon Properties Ltcl. v. Dr. Bhalchsnclrs Lctboratories 'AIR 2004 SC 1787 ' I .Inthe reply filed by the DSIIDC in W 'P.(C) 7768 of 2010 (which reply is comrnon to all the writ petitions) the basis for charging the cotnponent for cross-subsidy towards category such as EWS has been explained 'i.n parallasunder: . "That during the last 3-4 years, the answering respondent has W.P.(c). Nos. 7747 of 20L0 batch iose 6 of 77 :l : on \rL- completed the development in Bhorgarh industrial area and after taking into account the enhanced land cotnpensations and enhanced project costs, the costs pel sq.rit of saleable area has been calculated as Rs.8158/- per sq.mt in Financial Year 2008-09 ' Tire matter was placed before the Governtnent, and the governmerit, after taking into consideration the cost deterrnination methocl adopted by DDA and the future maintenance needs of the industrial area)approved the following cost: a) Gross cost per sq.mt. in 2008-09 b) Cost of capital @ I0% p.a. for 2009-lI c) 5OYo of gross cost added as per Govt. Policy for Light industry (for cross subsidies towards categories such as EWS) Rs.8518.10 Rs. 1788.80 Rs.4259.10 Rs. 1000.00 Rs.15566.00" Future O & M cost (CorPus Fund) Cost per sq. mt. (a+b+c+d) g. A copy of the govemment circular dated 17 'r ' August 2010 notifoing the rate for the Industrial Estate - Bhorgarh a-II has been enclosed. It is pointed out that a Committee was constituted comprising the,Additional Commissioner of Industries (GNCTD) as Chailnan, the Deputy commissioner of Industries (GNCTD), chief Manager (Relocation), DSIIDC, Deputy Financial Advisor (works), DSIIDC arid Executive Engineer (Bhorgarh), DSIIDC. The Committee determined t|e cost based on the expenditure incurred and projected by the DSIIDC ' 'the Commiffee noted that the cost of the plots had increased fi 'orn the initial estimate of I{s. 5J5Ol- per sq. m. to about Rs ' 8,5201- pet sq 'm 'due to various factors such as improvement of street lighting, inclusion of 60 rn ' wide MP Road for better connectivity, construction of an underground d) e) W.P.(C) Nos. 7747 of 2070 botch Page.7 of 1.7 \t reseil/oir and effluents pumping station, increase in the cost index. increase in the Dethi Jal Board charges and in increase in electrification costs etc. This Committee also took note of the problems of maintenance faced by industrial estates set up earlier and suggested the setting up of a colpus for a longil.rro rnaintenance fund. Accordingly, it was sllggested that Rs. 1,000/- pel sq. ln. should be chalged from each allottee fr-rr creation of the fund so that it rnay generate a colpus of Rs. 75 crores. A copy of the minutes of the Committee has been enclosed with the affidavit. 9. It appears that the rationale for including a component towards cross- subsidy for EWS housing was based on the prevalent practice of the DDA. In paras 15 and 16 of the affidavit, it has been explained as under: "15. That the multiplier of 1.5 applied for Bhorgarfi is the same as that applied by the DDA for plots under 'Light Industry ' category i,n the size range of 50 sq. meter to 400 sq ' meter ' The multiplier of 1.5 has been applied as per the directions and approval of the Govemment. The amount so generated is to be used towards non- . targeted cross subsidy for developrnent of Economically Weaker Sections (EWS) housing, JJ & squatters, settlement, etc. 16. That the DDA has been applying the rnultiplier at least ftom Ig92 onward. In this regard, the documents obtained fi 'om DDA toward costing of Dwarka Project in 1992 and Tila 'i I(alan Plastic ' Bazaar rn 1999; and some notifications of Predetermined Land Rates issued by the Ministry of Urban Development and Poverly Alleviation, Ggvernment of India rn 2009 and 2010 are enclosed as Annexures-C (Colly) respectively. W.P.(C) Nos. 7L47 of 2070 batch Page I of 77 \\ The perusal of DDA land costing methodology (Annexure Cl) would clearly reveal that in Dwarka Project in 1992, against the breal<-even rate of Rs. 1100.46 per sq.mt., a higher rate of Rs. 1375.54 has been charged for industrial land, whereas lower rate of Rs.550.22 per sq.mt. has been charged for EWS and JJ & Squatters setllement. Lower rates have also been charged fi 'om some other categories like LIG, charitable institutions, and utilities. Sirnilarly, DDA Resolution of lggg (Annexur e C2) notifies the rate of industrial plots of 300 sq. meters and 495 sq. tnetets as Rs. 2305 per sq. meter a1d Rs. 2689 per sq. meter against the Break Even Rate of Rs. 1536 per sq. meter; whereas much. lower/nominal costs have been fixed for lands for police station, fire station, health services, utilities, etc. Tire Government of India, Ministry of Ulban Developrnent notifications {Annexures C3 (Colly)} of pre-determined rates for Plastic Bazaar, Tilai Kalan for year 2008-09 and 2009-10 also apply rnultiplier of 1.5 for 'Light Industry ' plots of 300 sq. meters in size. From the above it would be kindly seen that the policy of applying multiplier is reasonable and is in use for a long time '" 10. It is explained that the DSIIDC did not apply the above multiplier oi ' 1.5 for Bawana-I plots since it had a low market price in the initial years of development. A number of eligible applicants had opted out of those allotments and sought refund of the eatnest money deposited. Flowever, the experience as regards the Bhorgarh plots has been different. It is pointed out thal the market rate for the sale disposal of the land and for charging unearned increase at Bawana (Bhorgarh) has continuou-qly W.P.(c) Nos. 7747 of 20L0 batch Page 9 of 7.7 t< .increased as under: "Year 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-1 I Bawana Industrial Area (Bhorgalh) ' W.P.(C) Nos. 7747 of 2070 batch Rate of Industrial land at Bawana (Rupees per square rneter) 6,720 8,400 10,080 27,400 30,140 33,I54 36,469" 11. It is fuilher stated as under: .,It. is pertinent to mention that the market rate for industrial land notified by the government for 2010-11 for Bawana Industrial Area is Rs. 36,4691- per square meter. Therefore the market rate for Bhorgarh may be taken as Rs. 36,4691- per sq ' meter at par with the rate of nearby estates. 'Compared to the market rates, the allotment rnade by the respondent @ Rs.15,566 l- per sq. meter is still much on the lower side and is reasonable. Even the circle rate determined by the Govetnment of NCT of Delhi is approxirnately Rs '27,4001-) ' 12. The Petitioners have, however, disputed the 4bove figures. This cotir[ has no means, in a petition under Article 226. of the constitution, to determine the above disputed question of fact ' There is no basis for the Court to doubt the coffectness of the details set out by the DSIIDC in its affidavit as regards prevalent marftet rate and 'circle rates for plots ip Page L0 of L7 \/ o 13. On a consideration of the submissions of the 'learned 'counsel for the parties, one of the first questions that this Court is called upon to consider is whether the recovery of 50Yo of the gross cost for light industries fbr cross-sirbsidy towards EWS housing, amounting to Rs. 4259 '10 per sq ' m., in terms of the policy of the GNCTD, is arbitrary or unreasonable irl the context of Article 14 of the Constitution? This Courl finds that the : decision to charge Rs. 4259.10 as cross-subsidy towards categories such as EWS housing is based on a government policy. The allotment letters ' were issued to about 4615 units in Bhorgarfi in 2005 and 2006. It was clearly indicated atthattirne that the cost per plot was Rs ' 5J501- per sq: rn. but also that it was a tentative one. The precise clause in the allotment letter in this regard read as under: "The tentative cost of the plot is Rs. 51501- pel 'square meter, ' ' which is subject to change depending upon the actual cost qf development of the industrial plot and directions issued by the .: Government of Delhi in this regard ' ': This is to inform you that the cost indicated above is tentative. The allottee will be liable to pay any increase in the cost of the plot due to any reason(s) whatsoever '" 14. There were two distinct caveats in the above clause. The first was that. the cost was itself tentative. It depended on the actual cost of development of the industrial plot. The second was that it also depended on the directions issued by the GNCTD. The addin g of 50o/o of the gross cost. of cross-subsidy fo1 EWS housing to the cost of the plots is relateable to the W:P.(c) Nos. 7747 of 2070 botch Poge 17 of 77 \l directions issued by the GNCTD. In view of the above clause in allotment letter, the Petitioners cannot claim to have been taken surprisb on account of the inclease in the cost on the above Score ' 15. In this connection, thii 'Court would like to observe that there is a clear distinction between the facts in the case of P.N. Vernxil v. Union of Indiu and the present case. Para 4 of the judgment in P.N. Vernm sets out the relevant clause in those cases as regards cost of the SFS flats ' The said clause reads as under:- "The estirnated cost of flats on each floor would be announced whenever specified schemes have been prepared taking into . . consideration the location of each scheme, specifications and ' design of flats, cost of construction pre,ruiiing at the time of the ' . execution of the scheme, fluctuations in other cost 'factors '" 16. It is plain that in the above clause in P.N. Vu,n ' 'o, no caveat was entered that the cost would increase on account of the directions issued by government from time to tirne. Secondly, those were SFS flats and no parallel can be drawn with a scheme like the present one iuvolving allotment of industrial plots. For the same reason, the judgment of the Supreme Court in DDA v. Joint Actiort Committee is also distinguishable. 17. The decision of the DSIIDC, not to recover frorn the allottees of plol 's at Bawana-I or Narela, any element of 'cross-subsidy towards EWS housing, is really a matter of policy. The DSIIDC would have had to the by Ir - W.P.(C) Nos. 7L4L of 2010 batch Page 12 of 77 \8 accolrnt for several flrctors including the way in which the market behaved on the earlier occasion. The view of the DSIIDC that, given the response of the allottees of plots in Bawana-I, it would not be advisable to increase ftirther the cost of the plots by adding any element of EWS cross-subsidy, cannot be said to be unreasonable or arbitrary. The situation now is obviously different. The figrrres set out"in the counter-affidavit of the DSIIDC show that there has been a marked increase in the market rates of plots in Bawana-Il. The rate which was Rs. i0,080/- per sq. m. in2006-07 increased to Rs. 27,400 per sq. m. in 2007-08. The subrnission that the Respondents by not adding an element of EWS cross-subsidy to the cost of the plots at Narela, where the market price was deterrnined at Rs.24,000 l- per se. ffi., acted arbitrarily is again to no avail. it is really for the Respondents to decide whether or not they wottld ctrarge the cross- subsidy element frorn different set of allottees at a given point in tirne. It is difficult to hold such decision to be either arbitrary or discriminatory in tenns of Article 14. In rnatters of allotrnent of land at subsidised rates, the passage of tirne and the behaviour of the market are relevant factors which cannot be ignored by the Respondents ' 18. It is urged that,the Respondents should not be sirnply seen to be rnaking profit and were expected to operate on a no-profit-no-loss basis. If one went by the figrrres given by the Respondents in their connter affidavit, then a plot of land for which the circle rate deterrnined by the GNCTQ is Rs. 27,4001- per sq. rn., ancl for which the rnarket rate is i{s. W.P.(C) Nos. 7747 of 2070 batch Page 73 of 77 o 36,4601- per sq. m., is being allotted at a rate of Rs. 15,5661- pel sq. m ' Surely, it cannot be said that the DSIIDC is profiteering fiom the sale of plots 'at Bawana-Il (Bhorgarh). It can well be said that the Petitioners ale getting the plots at subsidised rates. 19. It was not.practical to expect the Respondents, to offer the alternative plots to all the 23,000 plot-holders running industrial units in nol]- conforming area as on 19tl ' April 1996 at one go. Alternative land had to be located and then developed to make it suitable for industrial purposes ' The relocation had to obviously be done in phases and over a period cf time. It is inevitable in the process that the allotment of plots had to be sequential. This would inevitably result in the later allottnents being rnac-le at a cost higher than the earlier allotments. The malket value of the lan 'J has gone up in the meanwhile and thal too dramatically ' The later allottees cannot be said to be prejudiced on this score. Moreover, admittedly the allottees have been extended the facility. of availing of loans frotn financial institutions for the entire cost of the plot. 20. In its order dated 27tt ' October 2010 rn Mohtl. fsan v. DSIIDC, this court had, while disrnissing the writ petitions, observed as under: ' ' 'l ' "2. This Court finds that the scope of interference by this Court in exercise of its powers under Article 226 of th 'e Constitution in matters involving fixation of price by the authorities for land is narrow ' In I{avitu Attuia v. Delld state Inclustrial & InJiastructuie Development corporstion Ltd. (decision dated 16tr ' February 2010 in civil Appeal No. 2192 12010 etc.) the supreme court was considering W.P.(C) Nos. 714L of 207O batch . Pqge 74 of L7 ?2 the challenge to the action of the DSIIDC in charging Rs. 4,2001- per sq. m. for plots in Bawana Ildustrial area, Rs. 5,4001- pet sq. m ' fof plots in the Industrial estate at Narela, Jhilmil and Badli and Rs ' 7,5601- per sq. m. for plots in Patparganj Industrial area. A Single Judge of this Court had set aside the dernand for the increased cost on the ground that the DSIIDC failed to show that it had undettaken any development activity or incuned any expenditure loss for the plots. This was reversed by the Division Bench of this Court by a judgmqnt dated 22nd February 2008. The Division Bench upheld the action of tlre DSIIDC of charging F(s. 7,7761- pet sq. m. for the plots at Nalela. This judgment was challenged