THE HONOURABLE SRI JUSTICE A.GOPAL REDDY and THE HONOURABLE SRI JUSTICE P.DURGA PRASAD W.A.No.1167/2003 Dt.1-12-2010 1. Mohd. Moizuddin and another ..Appellants ..Petitioner V. ..Respondents 1. The Government of Andhra Pradesh, represented by its Principal Secretary, Revenue Department, Secretariat, Hyderabad and others. ..Respondents The Court made the following: THE HONOURABLE SRI JUSTICE A.GOPAL REDDY and THE HONOURABLE SRI JUSTICE P.DURGA PRASAD WA NO.1167/2003 JUDGMENT (per the Honourable Justice A.GOPAL REDDY) This writ appeal under Cl.15 of the Letters Patent filed by the appellants-writ petitioners is directed against the orders of the learned single Judge dt. 9-6-2003 passed in WP No.7661/2003. The writ petitioners filed the writ petition, inter alia, for the following relief: “issue a writ, Order or direction and more particularly one in the nature of writ of Certiorari by calling for the records leading to respondent No.1’s proceedings BB3/1265/02 dt.19-2-2003 and 25-3-2003 and the notice issued by the respondent No.2 in proceedings No.4/548 dt. 27- 3-2003 and quash the same by declaring that the petitioners’ building comes within the definition of residential and consequently direct the respondents to convert the leasehold rights of petitioners’ over Plot No.295 under Lease No.2996, situated at Road No.10, West Marredpally, Secunderabad, into freehold rights of the petitioners; by collecting Rs.180/- per sq.yard for the land admeasuring 745 sq.yards..” The facts, in nutshell, giving rise to filing of the writ appeal, are as under: The Government of Andhra Pradesh, represented by its Military Estate Officer, Secunderabad Circle executed a lease deed in favour of P. Philips S/o M.P.Pothan for the land ad-measuring 6707.58 sq.feets (745-28 sq.yards) in plot No.295 of West Marredpally, Secunderabad, for a period of 30 years vide lease deed No.881 dt. 18-8- 1939. The said lease was renewed for a further period of 30 years on 13-11-1968 vide lease deed No.2996 commencing from 9-9-1968. M.P. Philips, lease agreement holder transferred the land in favour of one Tarabhai W/o P.V. Ramana Mudaliar vide transfer agreement No.313 dt. 4-2-1970, contrary to Condition No.8 of the lease deed dt. 13-11-1968, whereunder the lessee was prohibited from transferring the premises which is under lease or any part thereof without the consent in writing of the Estate Officer and upon every assignment, transfer of sub-lease of the premises or any part thereof within one calendar month and thereafter to deliver a notice of such assignment, transfer, sub-lease to the Estate Officer setting forth the names and description of the parties of every assignment, transfer or sub-lease and the particulars and effect thereof. Tarabhai entered into a transfer agreement with one Haleema Bee W/o late Syed Ibrahim and Master S.A. Gaffar and Master Sathar who are the sons of Syed Ibrahim on 27-9-1971, who transferred the property in favour of Fatimunnisa Ibrahim w/o Mohd. Moizuddin and Mohd. Moizuddin S/o Mohd.Hameeuddin under dt.14-12-1984. While so, the Estate Officer issued a show cause notice No.369/4/548 dt. 22-12-1992 to the petitioners calling upon them as to why lease deed No.2996 dt. 13- 11-1968 should not be cancelled and the land be resumed for violation of conditions of the lease by raising illegal constructions without permission from the competent authority. To the said show cause notice, the petitioners submitted a reply on 7-1-1993. The Estate Officer submitted a report to the Commissioner of Land Revenue on 27-1-1993. While matter stood thus, the petitioners filed W.P.No.165/1993 to quash the show cause notice dt. 22-12-1992. The said writ petition has been disposed of on 19-6-2001 directing the respondents therein shall pass appropriate orders after taking into consideration the explanation offered by the petitioners to the show cause notice dt. 22-1-1992 and further directing to give one more opportunity to submit further representation, if they do so, within a period of two weeks from the date of order and if the petitioners seek personal hearing, the same should also be offered to them and thereafter final orders shall be passed. On disposal of the said writ petition, the Estate Officer vide Proceedings No. 4/548 dt. 30-10-2002 passed orders rejecting the case of the petitioners and observed that the lessee has violated the condition Nos. 1 and 8 stipulated in the lease deed by constructing flats and transferred to various individuals by way of sale without obtaining prior permission from the competent authority ie., Commissioner of Land Revenue and changed the nature of lease to commercial activity. The petitioners made an application to the Estate Officer to convert the leasehold rights into freehold rights on 16-6-1997 in the light of the guidelines issued in G.O.Ms.No.816, Revenue (ASN.III) Department dt. 9-8-1994. The said application was forwarded by the Estate Officer with his recommendations to the Commissioner of Land Revenue recommending Rs.180/- per sq.yard towards conversion charges. Thereafter, the Chief Commissioner of Land Administration vide letter No.BBL2/33/98 dt. 4-12-2000 rejected the proposal submitted by the Estate Officer and directed the Estate Officer to inspect the spot in person and send the revised proposals duly rectifying the defects pointed out in the rejection order. In obedience to the directions issued dt. 4-12-2000, the Estate Officer forwarded his recommendations vide letter No.4/548 dt. 25-11-2002. On the recommendations so made, the present impugned proceedings in CCLA No.BB3/1265/02 dt. 19-2-2003 have been issued by the Chief Commissioner of Land Administration, Andhra Pradesh, Hyderabad according conversion of lease hold rights of plot No.295 admeasuring 745-28 sq. yards situated at West Maredpally, Secunderabad covered by L.D.No.2996 dt. 13-11- 1968 into freehold rights in favour of the petitioners subject to payment of conversion charges for 745.28 sq.yards at Rs.2500/- per sq.yard as per Annexure-III of G.O.Ms.No.816 dt. 9-8-1994 at Rs.18,63,200/-. Aggrieved by the proceedings dt. 19-2-2003, the petitioners filed an application dt. 20-3-2003 before the Chief Commissioner of Land Administration, Hyderabad to charge the residential rates and to issue revised orders. The Chief Commissioner, by its proceedings dt. 25-3-2003 rejected the application of the petitioners. After passing orders dt. 25-3-2003 by the Chief Commissioner, the third respondent-Estate Officer, Secunderabad issued notice dt. 27-3-2003 demanding payment of Rs.18,63,200/- towards conversion charges and Rs.3,98,518/- towards lease rent upto 27-3-2003. Questioning the proceedings dt. 10-2-2003 and 25-3-2003 of the second respondent and notice dt. 27-3-2003 of the third respondent, the present writ petition has been filed. In the counter affidavit filed on behalf of the respondents, the third respondent, namely, Estate Officer & Joint Collector, Secunderabad, while placing history as referred to above, stated that the petitioners never entered into a lease agreement on 13-11-1968, but in fact lease was transferred in their favour on 14-12-1984. Contrary to the conditions stipulated in the lease deed, the petitioners have constructed ground plus 2 floors for the purpose of selling the same to the third parties. In the representation dt. 20-7-1994 submitted by the petitioners, they have categorically stated that they have constructed flats and intended to sell them to 16 persons, which itself is to be treated as a commercial activity. The value for regularization is fixed as per Cl.(vi) of G.O.Ms.No.816 dt. 9-8-1994. Cl. (iv) envisages in case of residence 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. The conversion charges were fixed as per the rates fixed in Annexure-III, and there is no irrationality in making the demand. Since the lease agreement expires on 13-11-1998, from the said date, the occupation of the petitioners is unauthorized. G.O.Ms.No.816 dt.9-8-1994 is valid for one year from the date of issuance of GO, which was extended by G.O.Ms.No.286 dt. 9-4-1997 till 30-6-1997 and further extended by G.O.Ms.No.705 dt. 3-10-2000 till 31-3-2001. Therefore, notice was rightly issued demanding the amount of Rs.3,98,518/- towards lease rent at 5% per annum on the current basic value from 8-8-1998 to 27-3-2003. Learned single Judge after considering the rival contentions of the parties while disposing of the writ petition observed that once the residences which were converted into commercial purposes such as commercial complexes/flats in violation of lease conditions, the rates applicable for commercial purposes will be levied as per Cl. (vi) of G.O.Ms.No.816, dt. 9-8-1994, and once the petitioners admitted that they constructed ground plus two floors, consisting of 16 flats, the Government rightly treated the same as commercial building and no illegality is discernible in fixing the rate at Rs.2500/- per sq.yard for conversion of leasehold rights into freehold rights. Since the petitioners approached the Government immediately after issuance of G.O.Ms.No.816 dt. 9-8-1994 in 1995, and burdening the petitioner with Rs.3,98,518/- is concerned, the question is left open and the petitioners can approach the Government with proper representation for waiving the amount and as and when such representation is filed, the Government shall consider the same subject to condition that the petitioners accept and pay an amount of Rs.18,63,2000/- towards conversion charges and pass appropriate orders. Learned counsel for the appellants strenuously contended that when the Estate Officer forwarded the application of the petitioners with his recommendations to treat the building as residential and to convert the same into freehold rights from lease hold by collecting Rs.180/- per sq.yard as per annexure-II to G.O.Ms.No.186 dt.9-8-1994, issuing the impugned proceedings dt.19-2-2003 treating the construction of building as commercial activity, is contrary to G.O.Ms.No.186. He further contended that once the Government decided to convert the leasehold rights into freehold rights, again issuing notice for collection of Rs.3,08,518/- towards lease rent is arbitrary and illegal. We do not see any merit in any of the contentions advanced by the learned counsel for the appellants-writ petitioners. Admittedly, no reply has been filed by the appellants/writ petitioners controverting the facts stated in the counter-affidavit filed by the respondents opposing the writ petition. In the representation made by the writ petitioners to the Estate Officer, Secunderabad on 20-7-1994, it was categorically stated that they have constructed flats and intended to sell them to 16 persons. Further in para 13 of the counter-affidavit, it was categorically asserted that under the guise of ground plus 2 floors, the petitioners have constructed 16 flats for the purpose of selling the same to the third parties, which is evident from the representation made by the petitioners for conversion of leasehold rights into freehold rights. Cl.(vi) of G.O.Ms.No.816 dt. 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 the Annexure-III shall be levied for the purpose of conversion of leasehold rights into freehold rights. If that be the case, no infirmity is discernible in the impugned proceedings dt. 19-2-2003 issued for conversion of leasehold rights into freehold rights on payment of conversion charges. Once the petitioners are in unauthorized occupation after expiry of lease and petitioners have not paid the conversion charges as levied in the impugned proceedings dt. 19-2-2003, the respondents are entitled to collect lease rent to a tune of Rs.3,98,518/- upto 27-3-2003 as demanded through notice dt. 27-3-2003.The learned single Judge rightly held that the Government shall consider the application, if any to be filed, for waiving the amount to a tune of Rs.3,98,518/- towards lease rent upto 27-3-2003 as demanded by the respondent No.3 in his notice dt. 27-3-2003 on payment of Rs.18,63,200/- towards conversion charges as demanded by the second respondent in proceedings dt. 19- 2-2003 and pass appropriate orders within four weeks. We do not see any ground to interfere with the impugned orders passed by the learned single Judge. The writ appeal is accordingly dismissed. No costs. -------------------- A.GOPAL REDDY,J --------------------- P.DURGA PRASAD,J DT. 1-12-2010 Kmr