THE HON'BLE SRI JUSTICE A. GOPAL REDDY & THE HON'BLE SRI JUSTICE P. DURGA PRASAD WRIT PETITION No:6151 OF 2001 Dated: 13.12.2010 Between: M/s. Kamal Roop Constructions ..Petitioner And 1. Government of A.P., rep., by its Principal Secretary, Revenue Department, Government of A.P., Secretariat, Hyderabad and others. .. Respondents This Court made the following THE HON'BLE SRI JUSTICE A. GOPAL REDDY & THE HON'BLE SRI JUSTICE P. DURGA PRASAD WRIT PETITION No:6151 OF 2001 ORDER: (Per Hon’ble Sri Justice A. Gopal Reddy) This is a writ petition under Article 226 of the Constitution of India filed by the petitioner seeking to issue Certiorari to call for records relating to Memorandum bearing No.45499/Asn.III (2)/2000-5, dated 18.1.2001 issued by the 1st respondent and to quash the same. The brief facts of the case are as follows: The land admeasuring 841.63 sq. yards in Plot No.177 situated at West Maredpally, Secunderabad was leased out to one Sri Belday Jagadeswaraiah and the lease was renewed for a further period of 30 years vide lease deed No.3130, dated 15.7.1970 in his favour for the purpose of dwelling house, commencing from 9.8.1969. After demise of the lessee Jagadeswaraiah, his legal heirs had transferred the lease hold rights of land in question in favour of the Managing Partner M/s. Kamal Roop Constructions, Maredpally, Secunderabad, by virtue of Transfer Agreement dated 15.12.1986, without obtaining prior permission of the competent authority viz., 2nd respondent-Chief Commissioner of Land Administration. The Managing Partner of the petitioner applied for conversion of leasehold rights into freehold on 27.6.1997 as provided in G.O.Ms.No.816 Revenue (Assignments III) Department, dated 9.8.1994. The Estate Officer, Secunderabad (Joint Collector, Hyderabad) while sending proposals for conversion of lease hold rights into freehold, reported that during inspection of the leased land on 7.10.1998, he observed that the lessee has constructed a multi-storied Residential Complex and sold away the flats to several people. While treating the entire extent of 841.63 sq. yards as commercial, the E.O. proposed to charge Rs.7,000/- per sq. yard i.e., the market value as per basic value register and accordingly, the total conversion charges comes to Rs.58,91,410/-. Accordingly, the 2nd respondent herein through his proceedings dated 8.3.1999 accorded permission for mutation and conversion of the lease hold rights into free hold for the land in question, subject to payment of Rs.58,91,410/- . Aggrieved by the same, the Managing Partner of the petitioner filed a representation before the 2nd respondent requesting for reassessment of the conversion charges and stating that in the leased land situated in residential area, after taking permission/sanction of the concerned authorities, they erected a building consisting of 16 residential flats and sold away to several purchasers and in order to provide parking space and for installation of Generator and pumpset, they provided an underground cellar and a portion of cellar is being used for general stores, catering, mostly to the residents of the said building in particular and public in general and that except the portion of underground cellar, the remaining area is being used for residential purposes. On the rejection of the same through the impugned proceedings, the present writ petition has been filed stating that legal representatives of late B. Jagadishwaraiah and the petitioner entered into an agreement for construction of residential flats in the said extent of land and accordingly, the firm together with the owners have made a joint application in accordance with the rules, to the competent authority viz., Municipal Corporation of Hyderabad and the authority accorded sanction for construction and accordingly, the petitioner constructed 16 residential flats, one pent house after setting apart some extent for parking. It is further stated that the construction itself was completed in the year 1985 and out of the flats, some of them have been sold and some of them have been retained in terms of the agreement entered into by the firm with the owners/lessees of the said land and that the purchasers of the said flats are salaried people and out of their life savings, they have purchased the property and that after completion of the constructions of the building, G.O.Ms.No.816, was issued and basing on the same, the petitioner firm applied for conversion of the land from lease hold to freehold and that as per the said G.O., an amount of Rs.1,44,000/- has to be paid for getting the leasehold land converted into freehold and the respondents cannot charge more than the said amount. It is also stated that initially, the 3rd respondent informed that the petitioner-firm is liable to pay a sum of Rs.9,14,364/- as conversion charges, treating the entire complex as residential barring the area which is covered by an extent of 2500 sq. ft., wherein a Mini Super market is being run. While so, the respondents issued a memorandum impugned herein fixing the rate at Rs.7,000/- per sq. yard on the premise that the application for conversion was filed in the year 1997 and therefore, this being the basic value that was reflected in the records, the said amount becomes payable. It is stated that once the Government expressed its mind to fix at a particular rate, it cannot thereafter whimsically change the price and therefore, the impugned memo is liable to be set aside and consequently, a direction be issued to the respondents to fix and accept the rate in terms of G.O.Ms.No.816, Revenue Department, dated 9.8.1994. A detailed counter affidavit has been filed stating about leasing of the property to Jagadishwaraiah and its renewal and issuance of G.O.Ms.No.816, dated 9.8.1994. It is stated that clause (vi) of G.O.Ms.No.816, dated 9.8.1994 specifies that in case of residences, which were converted into commercial purposes such as Commercial Complexes/Flats in violation of lease conditions, the rates applicable for commercial purposes as shown in Annexure-III shall be levied, and that as per Annexure-III of G.O.Ms.No.816, the basic value as on 1.10.1993 is Rs.2,500/- per sq. yard whereas orders were issued by the 2nd respondent on 8.3.1999 by taking the market value prevalent in 1999 as per basic value register is at Rs.7,000/- per sq. yard as proposed by the Estate Officer, Secunderabad. It is also stated that the Government in their memo No.45499/Assn.III(2)/2000-5, dated 18.1.2001 observed that in G.O.Ms.No.816, dated 9.8.1994 the basic value as on 1.9.1993, as per Register maintained by Registration and Stamps Department, has been taken into account and it is considered appropriate to collect market value as per the rate prevalent as on the date of seeking conversion, since the G.O., was valid for one year and it was subsequently extended from time to time upto 31.3.2001, and that the collection value of land as on 1.9.1993 now after a lapse of more than seven years is not proper and therefore, the proposal of the 2nd respondent was accepted to charge market value at the rate of Rs.7,000/- per sq. yard as per basic value register for conversion of lease hold rights into free hold for the land in question. It is further stated that as per Rule 22 of the A.P. (Secunderabad Area) Land Administration Rules, 1976, the Commissioner of Land Revenue is competent authority to sanction transfer of rights and interests in and sub-division of the lease hold lands, alteration in the plans or elevations of the structures thereon, and to permit the lessees to use the structures for the purpose other than that for which they were originally granted. It is clear that at the time of transfer of lease hold rights in favour of the petitioner and at the time of constructing a multi- storied residential complex, no permission was obtained from the competent authority and both the transactions i.e., transfer of lease hold rights and converting the residential building into commercial purposes, are in violation of conditions of lease and hence, as per Clause (vi) of G.O.Ms.No.816, dated 9.8.1994 commercial rates were charged. It is further stated that the legal representatives of lessee have violated the conditions of lease, for which additional compounding fees, at the rate of 20% on the conversion charges of Rs.58,91,410/- which comes to Rs.11,78,282/- can be levied as per paragraphs (vii) read with annexure –IV of G.O.Ms.No.816, dated 9.8.1994. But at the time of issuing conversion orders, dated 8.3.1999, the said aspect was overlooked and the petitioner has to pay Rs.11,78,282/- in addition to the conversion charges of Rs.58,91,410/-. It is further stated that this Court in WPMP No.7826 of 2001 in W.P.No.6151 of 2001, on 9.4.2001 passed interim orders subject to condition of the petitioner depositing the amount at the rate in terms of G.O.Ms.No.816, dated 9.8.1994, within a period of one week from 9.4.2001 but the petitioner has not complied with the said order fully except depositing Ac.1,44,000/- and therefore, the petitioner is not entitled to any relief in this writ petition. No reply has been filed by the petitioner controverting the averments made in the counter-affidavit. Sri P. Venugopal, learned Counsel for the petitioner contends that as per Annexure II of G.O.Ms.No.816, the basic value of conversion charges for the property in question shall be taken at Rs.950/- as per the Basic value register and its corresponding value of Rs.575/- per sq. yard and therefore, the conversion charges imposed in the present case is arbitrary and illegal and the same is not in conformity with G.O.Ms.No.816. It is further contended that when the petitioner made an application for conversion, the charges prevailing as on the date of conversion of premises, has to be taken into account, but not the date of application. We do not find any force in the contention of the learned Counsel for the petitioner in the light of the clauses (vi) and (vii) read with annexure IV of the G.O in question. At this stage, it is relevant to go through Clause No.vi of G.O.Ms.No.816, dated 9.8.1994 which clearly envisages that in a case of residences, which were converted into commercial purposes such as commercial complexes/flats in violation of lease conditions, the rates applicable for commercial purposes as shown in the annexure III shall be levied. In Annexure III, the basic value for conversion charges in respect of area covered in Marradpally, which is of an extent of 501 and above sq. yards, is at Rs.2,500/- as on 1.10.1993. Under Annexure IV dealing with the additional compounding fees for major violations, if the category of land is 501 sq. yards and above, the slab of conversion charges, is stipulated at 20% of the notified land value of the locality. Admittedly, the petitioner made an application on 11.10.1999. Therefore, it is desirable that the prevalent market value as on the date of application is to be taken into consideration for the purpose of conversion charges. Annexures II and III clearly specify the rates as on 1.10.1993. It is pertinent to note that the scheme is extended for one year from the date of issuance of G.O.Ms.No.816. It is not in dispute that the lease, which was originally granted, was for the purpose of dwelling house. However, the legal representatives of original lessee viz., Jagadishwaraiah transferred the lease hold rights to the petitioner without obtaining any permission from the lessor and thereupon, the petitioner constructed the flats on the lease hold land and the same falls under clause vi of G.O.Ms.No.816. The scheme under G.O.No.816 is valid for one year and thereafter, it was extended from time to time. At this juncture, it is contended by the learned G.P that merely because the G.O. was extended from time to time, the rates that are prevailing at the time of issuing the G.O cannot be made applicable in view of the escalation of the prices of the lands. In this regard, we find some force in the contention of the learned Government Pleader. This Court in a case of this nature i.e., in WA No.1167 of 2003 upheld the order of the learned single Judge dated 9.6.2003 passed in WP No.7661 of 2003 and dismissed the writ appeal, holding that clause vi of G.O.Ms.No.816, dated 9.8.1994 clearly envisages that in case of residences which were converted into commercial purposes such as commercial complexes/flats in violation of the lease conditions, the rates applicable for commercial purposes as shown in Annexure-III shall be levied for the purpose of conversion of lease hold rights into freehold rights. Under these circumstances, we have no hesitation to hold that the order passed by the Chief Commissioner of Land Administration charging the market value at the rate of Rs.7,000/- per sq. yards as per the basic value register for conversion of lease hold into free hold in respect of the land admeasuring 841.63 sq. yards in plot No.177 of West Marredpally, Secunderabad in favour of the petitioner, does not suffer from any irregularity and illegality warranting interference by this Court. Hence, the writ petition is liable to be dismissed. Accordingly, the writ petition is dismissed. No order as to costs. ________________________ Justice A. Gopal Reddy ________________________ Justice P. Durga Prasad Date: 13th December, 2010 Nn. THE HON'BLE SRI JUSTICE A. GOPAL REDDY & THE HON'BLE SRI JUSTICE P. DURGA PRASAD WRIT PETITION No:6151 OF 2001 (Order delivered by the Hon’ble Sri Justice A. Gopal Reddy) 13.12.2010