1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR **** :ORDER: M/s. Hilton Estate Pvt. Ltd. Vs State of Rajasthan & Ors. S. B. CIVIL WRIT PETITION NO.2367/2003 UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA Date of Order : 16th Feb., 2005 <><><> PRESENT HON'BLE MR. JUSTICE PRAKASH TATIA REPORTABLE Mr.J.P.Joshi, for the petitioner. Mr.H.R.Soni,Addl.GA, for the respondents. BY THE COURT: Heard learned counsel for the parties. Brief facts of the case are that the land in question was originally belonging to the erstwhile ruler of the State of Udaipur. The property in question is described as personal property of the Ex-ruler of the Udaipur for which petitioner has placed on record the copy of the list of the properties of the Ex-ruler. The said property was sold by the then 2 His Highness Maharana Bhagwat Singh to M/s. Lake Palace Hotels & Motels Pvt. Ltd. by registered sale deed dated 2nd March, 1963, copy of which is placed on record as Annex.1. The said property was sold to the petitioner vide sale deed dated 20th May, 1994 (Annex.3). The petitioner submitted an application for grant of permission for raising construction of a commercial complex, upon which, the respondent Municipal Council, Udaipur vide communication dated 19.2.2002 informed the petitioner that he should apply by submitting an application in proper form alongwith requisite fees. The petitioner was also informed that since petitioner wants to raise construction of a commercial complex, therefore, he is required to get the land converted for commercial purposes. The petitioner, thereafter, submitted an application seeking permission for construction under Section 170(1) of the Rajasthan Municipalities Act on 23rd March, 2003 (Annex.5). The petitioner also deposited the requisite fees vide Annex.5. The respondent Municipal Council, Udaipur by communication dated 28th March, 2003 (Annex.6) informed the petitioner that petitioner has not produced the documents evidencing the conversion of the land and he was also informed that all the matters relating to the conversion of land have been stayed by the State Government. The petitioner faced with this demand of conversion of land 3 before permission to raise construction can be granted, preferred this writ petition and sought relief that the respondent Municipal Council, Udaipur may be directed to grant permission to the petitioner to raise construction in terms of the application submitted by the petitioner under Section 170(1) of the Rajasthan Municipalities Act and further sought relief that the respondent no.2 be restrained from demanding any amount from the petitioner on account of conversion of the petitioner's land to commercial purpose. According to petitioner, the property in question was originally belonging to the erstwhile ruler of the State and after the merger of the States, the property in question was held to be private property of Ex- His Highness. The Ex-His Highness sold the property to M/s. Lake Palace Hotels and Motels Pvt. Ltd. Udaipur. According to learned counsel for the petitioner, there was no restriction for use of land when the land was belonging to the erstwhile ruler nor any restriction was put by the seller, erstwhile ruler when he transferred the property by a registered sale deed dated 2nd March, 1963 to M/s. Lake Palace Hotels & Motels Pvt. Ltd. Udaipur. The petitioner purchased the property from M/s. Lake Palace Hotels & Motels Pvt. Ltd. by a registered sale deed dated 20th May, 1994 and that sale deed also contains no restriction against the use of the property or contains any condition that land shall be used 4 only for particular purpose by the purchaser. According to learned counsel for the petitioner, the petitioner has right to use the land in question as per his wishes because of the reason that petitioner did not purchase the land containing any condition restricting its use for any particular purpose, therefore, the petitioner has every right to his land for any purpose including for commercial purpose and position has already been cleared and it is well settled in view of the various decisions of this Court that no conversion charges can be demanded for a land of which use has not been restricted to a particular purpose. According to learned counsel for the petitioner, the demand sought to be raised against the petitioner by the Municipal Council, Udaipur is under assumption that petitioner is required to pay the land conversion charges under Section 173A of the Rajasthan Municipalities Act, 1959, which is wrong. Sub-section (1) of Section 173A applies to the land, which was sold either by the State Government or any Municipality or by any local authority, but in this case, the land was not sold or allotted by the State Government, Municipality or local authority even to the original owner, Ex-ruler of the Udaipur State. Secondly, the petitioner is not intending to use the land in contravention to the land use shown in the Master Plan. According to learned counsel for the petitioner, even as per amended sub-section (2) of Section 173A, all 5 land falling in Municipal area are covered under Section 173A even then by this provision also it has been allowed to land owner to continue with the use of the land for which he was using and other land can be used in consonance with the purpose shown in the Master Plan irrespective of the fact whether such land was sold by the State Government or local body or otherwise and said restriction applies to the even those land which are not covered by sub-section (1) of Section 173A of the Act of 1959. According to learned counsel for the petitioner, though the petitioner's land is not earmarked for any particular use and it was put to use for commercial purpose or other than residential purpose by the Ex-Ruler himself and by the petitioner’s predecessor in title decades ago, therefore, he has right to use the land being for commercial purposes and further the petitioner is intending to use the land in consonance to the purpose as shown in the Master Plan for the land in question, therefore, the petitioner, in fact, only acting in accordance with scheme form in Master Plan. Learned counsel for the petitioner also submitted that not only the land was sold without any condition of restriction about use of the land, but in fact, it was put to use for commercial purposes is proved from the even reports of the Senior Town Planner, who reported that nearby area is occupied by the Hotels. Learned counsel for the petitioner relied upon various judgments 6 of this court, which are (i) Rajkumar & Anr. Vs. Municipal Corporation, Jodhpur (S.B.Civil Writ Petition No.2715/1997, decided on 5.3.1999) and which was upheld by the Division Bench of this court delivered in the case of Municipal Corporation,Jodhpur & anr. Vs. Raj Kumar & Anr reported in 2000(3) WLC (Raj) 299, (ii) the judgment of the learned Single Judge delivered in the case of Lalit Kumar Bothra Vs. Municipal Board, Sheogang reported in 2001WLC (Raj.) (UC) 152 (decided on 10.10.2000), and (iii) the judgment of the learned Single Judge delivered in the case of M/s. Jawahar Sons Enterprises Pvt. Ltd. Vs. State & Ors (S.B.Civil Writ Petition No.2736/2000, decided on 9.1.2002). In the case of Municipal Corporation, Jodhpur Vs. Raj Kumar & Anr. (supra), the Division Bench considered the scope of Section 173A and held that right of owner of the land to change its use from residential to commercial purpose or vice versa, if sale or allotment was without any condition or restriction on use of the land only for specified purpose then no conversion charges are payable by the owner of the land on account of conversion of the land for different use from which it is being used. Learned counsel for the respondents submitted that petitioner has not placed on record any proof that there was no restriction in the 7 petitioner's title deed and petitioner was permitted by the vendor to use the land for any purpose as per his wish. It is also submitted that petitioner himself vide Annex.1 (petitioner's application dated 11th July, 2003 annexed with the letter of the Dy. Legal Remembrancer dated 11th July, 2003 of the UIT) applied for conversion of his land, therefore, the petitioner now cannot say that petitioner purchased the land without any condition against its use. Learned counsel for the respondent also submitted that the respondent alone can decide or may be permitted to decide whether the land in question is commercial land or residential land and this court may not prefer to inquire into the nature of the land in dispute. On legal point, learned counsel for the respondent submitted that in view of the judgments referred above, the Government amended Section 173A of the Rajasthan Municipalities Act and inserted sub- sections (2) and (3) so that the land left out from the ambit of sub-sec. (1) of Section 173A may also be covered and the land which has not been originally sold by the State Government or Local Bodies, may come under restriction so that no land be permitted to be used for the purpose which is not in conformity of use of the land shown in the Master Plan. Sub-sec (3) has been introduced so that State Government may permit the change of land use in public interest and may recover 8 charges from the land owner for converting the land. Learned counsel for the respondent submitted that the purpose for the amendment was to see that land use should be in consonance and in conformity with the Master Plan and earlier in absence of sub-section (2), this court in the above referred judgments interpreted that the local authority or the competent authority cannot demand conversion charges for a land, which was not purchased from the State Government, Municipality or the local authority. To cover left out properties as is to include all land falling in Municipal area, the sub-section (2) was inserted. The further purpose of insertion of sub-section (2) was that no one be permitted to use the land for the purpose other than as provided in the Master Plan even if initially there was no restriction for the use of the land. in earlier provision of Section 173A, words “subject to condition of restraining its use for a particular purpose” were there and because of that reason this court held that when the land was not sold with restriction, restricting its use for any particular purpose than its use has not become restricted by sub-sec.(1) of Section 173 (as stood before insertion of new sub-secs.(2) and (3) in Section 173) and, therefore, no land conversion is necessary nor the Government can demand for conversion charges. Now in view of sub-sec. (2) of Section 173A, no land owner is allowed to use the land for any other purpose than the purpose which has been shown for the land in Master Plan. 9 Sub-section (3) in new Section 173A empowers the State Government to convert the land for use for any other purpose and charge the fees for conversion of land. According to learned counsel for the respondents sub-section (3) inserted in the year 1999, is a provision containing non-obstent clause and it has over riding effect over sub- section (1) and (2) of Section 173A, which empowers the State Government to allow the change of land use after charing the conversion charges from the owner of the property. Learned counsel for the respondent relied upon the judgment of this court delivered in the case of Kishan Lal Pungalia Vs. Municipal Corporation, Jodhpur & Anr. (S.B.Civil Writ Petition No.4197/2002, decided on 17.12.2002) wherein according to learned counsel for the respondent, the earlier judgment of this court delivered in the case of Lalit Kumar Bothra (supra) was considered and, thereafter, after noticing the effect of the amendment, this court held that even if the land in question may not have been purchased from the Municipal Corporation, State Government or the local authority and if the land is situated within the Master Plan area, its use whether residential or commercial can be permitted only by the Municipal Corporation in accordance with the conditions of the Master Plan. According to learned counsel for the petitioner, in view of the above judgment, it is clear that it is the local authority who can only permit the use of the land either for commercial or for residential 10 or for any other purpose and as per statutory provision, i.e., sub-section (3) of Section 173A, the local authority has power to charge conversion charges. Learned counsel for the respondent further relied upon the judgment of the Hon'ble Apex Court delivered in the case of Union of India Vs. Dev Raj Gupta (Civil Appeal No.1996/1990, decided on 13.9.1990) wherein the Hon'ble Apex Court held in that case that lessee is not entitled to use the land for commercial use without permission of the authority and without payment of conversion charges. (In that case, the land was given on lease for residential purposes was an admitted fact). I considered the submissions of learned counsel for the parties and perused the record. So far as the question of title of the petitioner is concerned, it is not in dispute. The property was the property of the erstwhile ruler of the Udaipur State is also not in dispute and the said property was sold more than 40 years ago by the erstwhile ruler to M/s. Lake Palace Hotels and Motels Pvt. Ltd vide sale deed dated 2nd March, 1963. The property in question has been described as “personal property” of Erstwhile Ruler seller. The property was purchased by a company registered under Companies Act having its activities of business “inter alia of running Hotel and Motel at Udaipur and Rajasthan and elsewhere in India and to provide lodging and boarding and other 11 facilities to the public including tourist Visitors and other delegated coming to India from Foreign Countries and to the members of delegated and mission from foreign Countries and to encourage and carry on and facilitate tourist guide in India more elaborately detailed in the objects clause of the Memorandum of Association”, which is mentioned in the sale deed itself (Annex.1). The same property was sold to the petitioner by the seller vide sale deed dated 20th May, 1994. In the sale deed it is mentioned that the property in question is known as “The State Motor Garage Garden Hotel”. It is also mentioned that the property is in the tenancy of State where Housing Corporation and in tenancy of others. It cannot be presumed the Erstwhile Ruler more than 40 years ago and a private limited company in the year 1999 will give wrong facts in the sale deeds in anticipation that after several years Master Plan will be prepared and some restriction will be imposed about the land use or that the law will be amended in the year 1999. Therefore, there is sufficient material available on record to show that land in question was never used for residential purpose and this fact finds support from the letter of the Senior Town Planner (Annex.8) wherein he described the land by saying “land referred and where at present Garden Hotel is running, entire area has been shown area of hotel in Master Plan” (translated in english) 12 In any of the these documents, there is no condition restricting the use of the land for any particular purpose. The above facts also clearly reveal that the property was not sold by the State Government, Municipality or any local authority to any of the persons mentioned above. The land appears to have never been used for residential purpose. It appears to have been used for other than residential purpose. May, incidentally for living. Keeping in mind above factual position, we may look into legal provisions. The relevant portion of unamended Section 173A is as under: - “173-A. Power of the State Government to allow change in the use of land-(1) Notwithstanding anything contained in this Act, where any land has bee allotted or sold to any person by a municipality or the State Government subject to the condition of restraining its use for a particular purpose, the State Government may, if it is satisfied so to do in public interest, allow the owner or holder of such land to use it for any other purpose other than the purpose for which it was originally allotted or sold, on payment of such conversion charges as may be prescribed: Provided that the rates of conversion charges may be different for different areas and for different purposes. (2) The conversion charges so realised shall be credited to the Consolidated Fund of the State or to the fund of the municipalities as may be determined by the State Government. (3) Such charges shall be the first charge on the interest of 13 the person liable in the land the use of which has been changed and shall be recoverable as arrears of land revenue.” It appears from the unamended Section 173A that this was provision applicable to the land:- (a) sold by the State Government, (b) or Municipality (c) or by local authority with condition of restraining the use of the land for a particular purpose. The above Section 173A was examined by this court in various cases and the controversy is settled by the judgments referred above and it was held that no conversion charges can be demanded by the State Government for a land, which had no restriction for use of the land or which has not been sold by any particular purpose and Section 173A (as stood) to the land sold by the State Government, Municipality or by local authority. The State Government found some difficulties and, therefore, amended the Section 173A. The relevant portion of Section 173A is as under: - “173-A. Restriction on change of use of land and power of the State Government to allow change of use of land.- (1) No person shall use or permit the use of any land situated in any municipal area, for the purpose other than that for which such land was originally allotted or sold to any person by the State Government, any municipality, any other local authority in accordance with any law for the time being in force or, otherwise than as specified under a 14 Master Plan, wherever it is in operation. (2) In the case of any land not allotted or sold as aforesaid and not covered under sub-section (1), no person shall use or permit the use of any such land situated in a municipal area for the purpose other than that for which such land- use was or is permissible, in accordance with the Master Plan, wherever it is in operation, or under any law for the time being in force. (3) Notwithstanding anything contained in sub-section (1) or sub-section (2), the State Government or any authority authorized by it by notification in the Official Gazette, may allow the owner or holder of any such land to have change of use thereof, if it is satisfied so to do in public interest, on payment of conversion charges at such rates and in such manner as may be prescribed with respect to the following changes in use: - (i) from residential to commercial or any other purpose; or (ii) from commercial to any other purpose; or (iii) from industrial to commercial or any other purpose; or (iv) from cinema to commercial or any other purpose Provided that rates of conversion charges may be,different for different areas and for different purposes.” The effect of the amendment of 1999 is that : - (1) All land falling in Municipal Area is included for the purpose of being governed by the provisions of Section 173A whether sold by the State Government or Municipality or any other authority or otherwise and which are not covered under sub-section (1) (underlined is effect of new sub-section (2) 15 (2) Use of land situated in Municipal Area shall be in conformity with A. The purpose for which it was originally allotted or sold (original use of land governed by sub- section 2) OR B. For the only purpose as specified under Master Plan (where-ever it is in operation) (effect of new sub- sections (1) and (2) of Section 173A) It is significant that sub-section (1) of Section 173A recognizes the right of land owner to use the land for the purpose for it was allotted or sold and prohibits only use of land contrary to purpose for which it was sold or allotted. Further it is also significant that even after amendment of Section 173A, sub-Section (2) further recognized the right of the owner of the land to use the land for the purpose “for which such land use was”. Such person is further permitted to use the land as permissible in accordance with Master Plan. Therefore, the owner has, by virtue of amended provision has right to use the land for the purposes for which it was sold or allotted to him since the land use is also in conformity with land use shown in Master Plan. Effect of the sub-section (3) is that inspite of restriction as imposed by sub-sections (1) and (2), the State Government shall have 16 power to convert the land for any purpose and for that purpose the State may demand charges. Meaning thereby if a person having his land with restricted land use in terms of his title deed, he may seek conversion of his land to other category after obtaining permission from the Government for that he is required to pay charges as per rule. Another effect of sub-section (3) is that by this sub-section, the State Government has been given power to convert the land for use for any purpose, even can allow the land use which is not in conformity of the Master Plan because of non-obstant clause in sub-section (3) of Section 173A. Sub-section (4) of Section 173A is very significance. By this all changes of use of land made before and are not in conformity with the provisions of the Rajasthan Municipalities Act, 1959 can be regularized and for that purpose, the person concerned is required to apply before the State Government or any authority authorized by the State for regularization of said use. For this also, the State is empowered to charge the conversion charges as provided under sub-section (3) of Section 173A of the Act of 1959. The sub-section (5) provides that even in case the person, who changed the use of the land and that change is not in conformity with the provisions of the Act of 1959 then the State and the State Authorities can suo motu determined the conversion charges after due notice and after giving opportunity of haring to the concerned parties and, thereafter, may determine the conversion 17 charges, which shall be payable to the concerned Municipality. None of the provision of the Rajasthan Municipalities Act provides that there shall be automatic conversion of the user of the land because in the Master Plan the land in question fell in area reserved for any particular purpose. Therefore, a complete reading of all the sub-sections of Section 173A further reveals that the land of which use has been changed, is at the most liable for conversion charges for the purpose of regularization. None of the above provisions as framed under Section 173A provides that the person, who purchased the property without having restriction for its use shall now after coming into force of the amended provisions of law shall have restriction for the use of the land as a condition in the title deed. The above provisions, particularly, sub-sections (1) and (2) only provides that as mentioned above; (i) no person shall use or permit the use of any such land for the purpose other than that for which such land use was, or (ii) shall not use the land in