M/S. Ansal Properties & Industries Ltd vs State Of Haryana & Anr

2. The appellant has challenged the said demand of the second respondent as unlawful being contrary to the statutory provisions pertaining to the construction of internal community buildings, which only mandates transfer of land free of cost to the Government, if the Government so desires, but without providing for any amount chargeable from the licensee to the Government for the construction of these internal community buildings.

4. Appellant is a public limited company registered and incorporated under the Companies Act, 1956 and is into the business of real estate development and development of colonies. Since 1983, the appellant Company had been granted licenses by the Director, Town and Country Planning (for short "Director") being respondent No. 2 herein under the provisions of Haryana Development and Regulation of Urban Areas Act, 1975 (for short the "Act") and Haryana Development and Regulation of Urban Areas Rules, 1976 (for short the "Rules") for setting up colonies in the District Gurgaon, Haryana. For the said purpose, agreements were entered into from time to time between the appellant Company and respondent No. 2 in the prescribed form i.e. LC-IV, under Rule 11 of the Rules. The said licenses were renewed from time to time. Page 2 of 32

(3) After the enquiry under sub-section (2), the Director by an order in writing, shall -

(a) grant, a licence in the prescribed form, after the applicant has furnished to the Director a bank guarantee equal to twenty five per centum of the estimated cost of development works as certified by the Director and has undertaken--

(i) to enter into an agreement in the prescribed form for carrying out and completion of development works in accordance with the licence granted:

Section 5. Cost of Development Works - (1) The colonizer shall deposit fifty per centum of the amount realised, from time to time, by him, from the plot-holders within a period of ten days of its realisation in a separate account to be maintained in a scheduled bank. This amount shall only be utilized by him towards meeting the cost of internal development works in the colony. After the internal development works of the colony have been completed to the satisfaction of the Director, the colonizer shall be at liberty to withdraw the balance amount. The remaining fifty per centum of the said amount shall be deemed to have been retained by the colonizer, inter-alia to meet the cost of land and external development works. (2) The colonizer shall maintain accounts of the amount kept in the scheduled bank, in such manner as may be prescribed.

Page 5 of 32 (2) After cancellation of the licence, the Director may himself, carry out or cause to be carried out, the development works in the colony and recover such charges as the Director may have to incur on the said development works from the colonizer and the plot-holders in the manner prescribed as arrears of land revenue.

(4) Notwithstanding anything contained in this Act, after the colony has been fully developed under sub-section (2), the Director may, with a view to enabling the colonizer, to transfer the possession of and the title to the land to the plot-holders within a specified time, authorize the colonizer by an order to receive the balance amount, if any, due from the plot-holders, after adjustment of the amount which may have been recovered by the Director towards the cost of the development works and also transfer the possession of or the title to the land to the plot- holders within aforesaid time. If the colonizer fails to do so, the Director shall on behalf of the colonizer transfer the possession of and the title to the land to the plot-holders on receipt of the amount which was due from them.

(5) After meeting the expenses on developments works under sub-section (2), the balance amount shall be payable to the colonizer."

4. Percentage of area under of roads, open spaces etc. in layout plans section ; 3(4) and 24 :- (1) In the layout plan of a colony other than an industrial colony, the land reserved for roads, open spaces, schools, public and community buildings and other common uses shall not be less than forty five percent of the gross area of the land under the colony :

12. Grant of Licence. Section 3(3) and (4) - (1) After the applicant has fulfilled all the conditions laid down in rule 11 of the satisfaction of the Director, the Director shall grant the licence in form LC-V. (2) The licence granted under sub-rule (1) shall be valid for a period of two years from the date of its grant during which period all development works in the colony shall be completed and certificate of completion obtained from the Director as provided in rule 16.

3. Upon cancellation of the licence under Clause 2 above the Govt. may acquire the area of the aforesaid colony under the Land Acquisition Act, 1894 and may develop the said area under any other law. The Bank Guarantee in that events shall stand forfeited in favour of the Director.

9. In the present case, the respondent No. 2 by letter dated 11.01.1988 informed the appellant Company that it was required to pay due amount of Rs. 3.72 lacs per gross acre on account of external development charges. It was also mentioned in the said letter that an amount of Rs. 3.72 lacs per gross acre, in fact includes Rs. 61,000/- per gross acre on account of internal community buildings for which no recovery should Page 13 of 32 be made from the plot holders. It was also mentioned in the said letter that credit would be given by Haryana Urban Development Authority for the internal community buildings already constructed by the colonizer namely the appellant. Again under letter dated 07.10.1993, the appellant Company was informed that before its licence could be considered for renewal, the appellant Company was required to pay the aforementioned charges. Subsequently on 04.05.1994, respondent No. 2 issued letter to the appellant informing that the licence of the appellant would be renewed only after the deposit of the aforesaid amount. Aggrieved by the aforesaid letter, the appellant Company made several representations to respondent Nos. 1 and 2 contending inter alia that as per the licence agreement and also as per the provisions of the Act and the Rules the appellant Company was not liable to pay the amount of Rs. 61,000/- per gross acre towards the construction of internal community buildings. It was also submitted in the said representations by the appellant that the Director had wrongly included the above said amount and the said demand was not only unjust and arbitrary but also contrary to licence agreement and also against the provisions of the Act and the Rules framed thereunder.

10. As its aforesaid representations did not bear any fruits, the appellant Company filed a writ petition before the Punjab and Haryana High Court challenging the demand letters dated 11.1.1988, 17.10.1993 and 4.5.1994 to the extent of demand for Rs. 61,000/- per acre (and interest thereon) on account of internal community buildings, by including it in the external development charges. The appellant also contended inter alia that as per provisions, the licensee was required to construct at his own cost either itself or through an institution or individual, the schools, hospitals, community centres and other community buildings or to transfer to Government free of cost the land set apart for schools, hospitals, community centres and other community buildings.

c) That the owner shall deposit fifty percent of the amount realized by him from plot holders, from time to time, in a separate account to be maintained in a Scheduled Bank and that this amount shall only be utilized by the Owner towards meeting the cost of internal development works in the colony.

(iv) of the Act and therefore, the challenge made to the aforesaid demand is unfair and unjustified.

15. So far the contentions with regard to the maintainability of the writ petition is concerned, we are not impressed and persuaded with the aforesaid contentions as according to the respondent themselves, the aforesaid demand is being made within the parameter and ambit of the provision of section 3(3)(a)(iv). That being the position, the demand made according to the respondent is a statutory demand and therefore challenge to such a demand could always be raised by the appellant by filing a writ petition as such a demand is sought to be protected and supported by way of statutory provision.

16. Even if the appellant has taken up the plea that such a demand is not supported by the statutory provisions and is in fact in conflict with them, even then the issue pertains as to whether or not such a demand could be made and supported by the said provisions, in which case, a writ petition is competent and maintainable and the plea raised by the respondent therefore with regard to the maintainability of the petition is only to be rejected which we hereby do.

29. We, therefore, now come to the last submission of the counsel appearing for respondent No. 2 which relates to issue of waiver and acquiescence in view of the fact that payment was made by the appellant which was demanded from him under the aforesaid letters.

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35. The appeal, therefore, stands allowed and we hold that respondent No. 2 was not authorized or justified in raising the aforesaid demand of Rs. 61,000/- per gross acre. Whatever payment is made in respect of the Page 31 of 32 aforesaid demand was not payable by the appellant to the respondent No. 2 as the said demand is held to be illegal, unjustified and unreasonable. The counsel for the appellant during the course of his arguments however submitted that the said amount now payable by the respondent No. 2 be adjusted towards the dues of the appellant. Accordingly we direct such adjustment of the amount in accordance with law.

36.We accordingly, dispose of this appeal in the light of the aforesaid directions and observations.

January 23, 2009 Page 32 of 32