* THE HON’BLE SRI JUSTICE V.V.S. RAO + WRIT PETITION No.11761 of 2002 % 13.8.2010 # R.Kondaiah, S/o.Kumara Swamy … Petitioner Vs. $ The Government of Andhra Pradesh, represented by its Secretary, Revenue Department, Secretariat, Hyderabad And others … Respondents ! Counsel for the petitioners: Mr. P.Venugopal Counsel for the Respondents: The Government Pleader for Revenue < Gist : > Head Note: ? Cases referred 1. AIR 1979 SC 1132 2. (2002) 3 SCC 711 : AIR2002SC1361 3. (2007) 10 SCC 198 THE HON’BLE SRI JUSTICE V.V.S.RAO WRIT PETITION No.11761 of 2002 August 13, 2010 Between: R.Kondaiah, S/o.Kumara Swamy … Petitioner And The Government of Andhra Pradesh, represented by its Secretary, Revenue Department, Secretariat, Hyderabad And others ... Respondents THE HON’BLE SRI JUSTICE V.V.S.RAO WRIT PETITION No.11761 of 2002 ORDER: The writ petition is filed challenging the communication dated 31.8.2001 of the second respondent, namely, the Chief Commissioner of Land Administration (CCLA), rejecting the request of petitioner to waive Additional Compounding Fee (ACF) levied in the proceedings of CCLA dated 08.3.1999. Petitioner contends that levy of ACF is discriminatory and violative of petitioner’s right under Article 14 of Constitution of India. The allegations in the affidavit accompanying the writ petition are as follows. The plot No.3119 admeasuring 405 Sq.yards situated at Rashtra Pathi Road (then called King’s way) was allotted to petitioner’s uncle, Buchi Veeraiah on 15.12.1936 on monthly rent of Rs.5/- for a period of 30 years with option to extend for a further period of sixty years. The lessee obtained permission and constructed double storeyed building in 1936. Subsequently the plot was divided into three being plot Nos.3119/1, 3119/2 and 3119/3. Petitioner’s father, Kumara Swamy, and the lessee Buchi Veeraiah divided the property in or about 1952. Petitioner and his two brothers again divided the property and were in possession of their respective shares. There was a civil dispute which ended in Supreme Court in S.Mohan Lal v R.Kondaiah[1]. After evicting the tenant, petitioner obtained permission in 1985 and replaced Jack arch roof with RCC roof. The further allegations in the writ affidavit are that the Government promulgated Andhra Pradesh (Secunderabad Area) Land Administration Rules, 1976 (LA Rules), in exercise of their powers under Section 172 of the Andhra Pradesh (Telangana Area) Land Revenue Act, 1317 Fasli. In view of the enabling provision, the Government issued G.O.Ms.No.816, dated 09.8.1994, for converting leasehold to freehold land on payment of conversion charges at various rates for different areas. The petitioner made an application for such conversion. The CCLA by order dated 08.3.1999 accorded permission for mutation and conversion of leasehold rights of plot No.3119/1 admeasuring 135 Sq.yards covered by L.D.No.2300, dated 26.5.1958 into freehold subject to payment of Rs.7,45,200/- which includes the amount of conversion charges at Rs.4,800/- per Sq.yard and additional compounding fee (typed as corresponding fee in the typed document filed in the material papers) of Rs.97,200/-. A consequential order was passed on 24.3.1999 by the third respondent requesting the petitioner to pay said amount by way of challan in named Bank. The petitioner then raised objection inter alia on the ground that the building is thirty years old, that it was constructed after obtaining necessary permission from local authority and that levy of compounding fee is not permissible under LA Rules. In response thereto, the Estates Officer advised the petitioner on 24.4.1999 to submit sanction plan issued by Municipal Corporation of Hyderabad (MCH, now Greater Hyderabad Municipal Corporation). Allegedly the same was produced. Without considering the same, by letter dated 27.3.2001, petitioner was again asked to obtain a certificate from MCH that permission granted earlier is valid. The petitioner then approached MCH. In the meanwhile by communication dated 31.8.2001, request of the petitioner to waive compounding charges was rejected, aggrieved by which the present writ petition is filed. The Estates Officer filed counter affidavit admitting the execution of lease deed in favour of Buchi Veeraiah, the subsequent division of the land into three portions, allotment of 135 Sq.yards to petitioner and sanction granted to ground floor. Referring to condition No.I(6) of the lease deed dated 26.5.1958 in favour of the petitioner, it is stated that a lessee cannot make any alterations or constructions without consent of Estates Officer. He did not obtain any permission. After he made application for regularisation under G.O.Ms.No.816, compounding fee was levied. The structure was altered in 1985 in violation of conditions of lease and petitioner let out two portions to tenants. It is also alleged that if a lessee wants to make alternations/construction besides sanction of MCH, permission has to be obtained from the Estates Officer. The violation was also pointed out by Government vide Memo No.49128/Assn.III(1)/96-1, dated 29.10.1996. In terms of the said memo, which was issued in furtherance of G.O.Ms.No.816, petitioner was penalized by levying compounding fee. The petitioner assailed the impugned order of the Government in levying compounding fee in addition to the conversion charges on the ground that the same is arbitrary and without jurisdiction. The petitioner does not dispute amount of Rs.6,48,000/- towards conversion charges of 135 Sq.yards at Rs.4,800/- per Sq.yard. Therefore, the short point is whether the action of respondents can be termed as arbitrary. The LA Rules referred to earlier came into force on 16.3.1978. By reason of Rule 1(3), all the leases granted in Secunderabad Cantonment area under any Regulations or Government Orders shall be deemed to have been granted under these Rules subject however to covenants and conditions of grant. Therefore, it is necessary to indicate the applicability and operation of these Rules in cases of conversion of leasehold to freehold. Rules 7 to 10 of LA Rules quoted here below are relevant. 7. Management of lands:— (1) Lands under the occupation of Government Departments shall be managed by the concerned Departments. ( 2 ) All vacant lands in Class "A" reserved for the occupation of the Departments of the State or Central Government or for the use of Institutions or Corporations owned or controlled by these Governments and lands in Class "B" shall be managed by the Estates Officer. ( 3 ) All lands in Class "C" shall be managed by the Municipal Corporation. 8. Reservation of lands for occupation of Government Departments etc.:— Lands in Class "A" shall be used only for occupation of Departments of the State or the Central Government or for Institutions or Corporations owned or controlled by these Governments. 9. Disposal of lands in Class "B":— All vacant lands in Class "B" shall be made into plots, taking into consideration the purposes, either commercial or dwelling, for which they can conveniently be put to use. The Estates Officer, after obtaining the approval of the Municipal Corporation and Hy derabad Urban Development Authority and after considering the needs of other Departments, may put up for sale, in public auction, such plots which can be put to use for commercial purposes and submit proposals for assignment, on payment of market value of such plots which can be put to use for dwelling purposes only in favour of individuals-or Associations, Institutions, Societies, Companies or Corporations registered under the relevant Acts or incorporated by an Act of Parliament or of any State Legislature. 10. Authority competent to confirm the auction sales or assignment:— The Commissioner of Land Revenue shall be the authority competent to confirm auction sale or to assign the land where the bid amount or the market value of the land covered by the auction sale or assignment, as the case may be, does not exceed Rs.25,000/-. In all other cases orders of the Government shall be obtained. The authority competent to confirm auction sale or assign may at its discretion, confirm or cancel the auction sale, order reduction or reject the proposals for assignment. Plain reading of the above Rules would show that lands under occupation of Government departments shall be classified as Class “A” (reserved for departments of State and Central Government), Class “B” (to be managed by the Estates Officer) and Class “C” (to be managed by the Municipal Corporation). The lands in Class “B” shall be made into plots and can be used either for commercial or dwelling purposes. The Estates Officer is competent to put up these plots for sale in public auction and the Commissioner of Land Revenue (CLR) shall be competent authority to confirm the sale or assignment of the land. After confirmation, it is the Estates Officer who shall execute the sale deed. In addition to these Rules, Rules 16 to 19 of LA Rules deal with lease of lands by the CLR. As per Rule 21 of LA Rules, power is reserved to the Government to terminate the lease for breach of conditions and covenants under which they are granted. Rule 20 of LA Rules speaks of violation of conditions and reads as under. 20. Breach of covenants and conditions:—The Estates Officer shall cause periodical inspection of all lands covered by the leases and shall submit proposals to the Government through the Commissioner of Land Revenue for the termination of the leases without any compensation whatsoever, if, in his opinion, there has been any breach of covenants and conditions by the lessees or by the persons claiming through or under them. The powers vested in Government under clauses (1) and (ii) of Rule 21 shall also be exercised by the Commissioner of Land Revenue on specific delegation in by an order of the Government. The covenants and conditions in a lease deed are referable to Section 1(3) of LA Rules. There is no dispute that the Estates Officer executed lease deed in favour of the petitioner on 26.5.1958. Conditions 5 and 6 of the same read as under. (5) Within 3 calendar months next after the date of these presents at his/their own costs to commence the construction of the shops dwelling houses and within one year to finish it for habitation/use on the premises hereby demised a portion of a shops & dwelling house together with all necessary out- houses, sewers, drains and other appurtenances, in accordance with a plan or plans to be approved in writing by the Municipality and not to erect to suffer to be erected on any part of the premises hereby C.V & Sons, Sec’bad demised any building, other than and except the shops & dwelling house covenanted to be erected, without the previous consent in writing of the Estates Officer, and within a period of two years to complete the shops & dwelling house in accordance with the plan previously approved. (6) Not to make any alterations in the plan or elevation of the said shops & dwelling house without such consent as aforesaid nor to use the same or permit the same to be used for any purpose other than a shops & dwelling house without the consent of the Estates Officer. Therefore, if there is any construction without previous sanction of the Estates Officer or deviation from the sanction plan, the same can be penalized by terminating the lease. The lessee who has been allotted land for the construction of one dwelling house and who constructs more than one such commercial or dwelling house cannot be heard to say that he/she has not violated the conditions of lease. In this case, admittedly the petitioner raised construction in 1985 without obtaining prior sanction of Estates Officer. In such an event, whether action of the CLR and Estates Officer in levying compounding fee is justified. Indisputably, petitioner’s right to seek conversion to freehold is regulated by G.O.Ms.No.816. Such conversion has to be in accordance with conditions (ii) and (vii) of the scheme approved in the Government Order. The conditions read as under. (ii) The conversion charges are as shown in the Annexures – I & II. (vii) In case of major violations where the violations are not in contravention of the Zonal regulations of the H.U.D.A. and building bye-laws of Municipal Corporation of Hyderabad additional compounding fee as shown in the Annexure – IV shall be levied subject to a minimum of Rs.1,000/- Marginal violation shall be ignored. In case of minor violations a penalty at the flat rate of Rs.1,000/- shall be levied. Above conditions are plain enough to belie any submission that respondents 1 and 2 cannot levy compounding fee. The counter affidavit was filed by the Estates Officer on 27.11.2009. The averments therein stand unrebutted and, therefore, petitioner’s plea that levy of compounding fee is arbitrary cannot be accepted. A reading of the LA Rules and the scheme vide G.O.Ms.No.816, leave no doubt that if a lessee violated the conditions of lease and did not comply with the conditions of scheme, it is always open to the authorities to levy compounding fee. It is settled that when a scheme is made for implementation of Government policy to confer largesse or some benefit, the scheme has to be understood without ignoring the decision of Government imposing conditionalities (see Association of Industrial Electricity Users v State of A.P.[2] and State of U.P. v S.K. Theatre Productions[3]). The LA Rules contemplate disposal of lands in Class “B” in Secunderabad Cantonment area by public auction. The Government probably considering the plight of lessees, who have been in possession of land for decades, gave a go-bye to the conditions and decided to convert leasehold into freehold. As seen from the scheme, it is optional for any lessee either to opt for conversion or to continue as leasehold. Having given option for conversion to freehold, petitioner cannot seek any relief contrary to the scheme approved by the Government in G.O.Ms.No.816, dated 09.8.1994. The writ petition is devoid of any merit. The writ petition, for the above reasons, is accordingly dismissed with costs. ________________ (V.V.S. RAO, J) August , 2010 NOTE: L.R. Copy be marked. (By order) YS [1] AIR 1979 SC 1132 [2] (2002) 3 SCC 711 : AIR2002SC1361 [3] (2007) 10 SCC 198