K.P. Shankaran Nair vs Bangalore Development Authority and Others

Ram Mohan Reddy, J.—Petitioner when allotted site No. 2306 ad-measuring 9.15 meters east-west and 12.20 meters north-south in all 111.63 Sq.M. in H.A.L. III Stage and put in possession on 23.5.1983, followed by execution of lease-cum-sale agreement of even date by the Bangalore Development Authority, under the City of Bangalore Improvement (Allotment of Sites) Rules 1972, noticed that adjacent to the site was marginal land measuring 81.43 Sq.M. which could not formed into a site. Similar was the situation of the adjacent sites bearing 2307 to 2313, hence the owners jointly, made an application dated 18.11.1983, Annexure-D, for allotment of said marginal lands, nothing precious was done, nevertheless, on 13th January 1986, BDA executed a conditional sale deed Annexure-A conveying the allotted site. It appears that petitioner along with others noticed supra, reiterated their claim for allotment of ''marginal land'' adjacent to their sites by letter dated 14.2.1989 Annexure-E, following by another letter dated 1.11.1994 Annexure-F, and yet another letter dated 6.1.2003 duly acknowledged in the endorsement dated 14.6.2004 Annexure-G of the respondent-Bangalore Development Authority. The said authority in its Board meeting, during the year 2004, resolved to convey 84.18 Sq.M. of the marginal land in favour of petitioner subject to payment of the average auction rate as disclosed on the reverse of Annexure-G.

It is the allegation of the petitioner that his neighbour, owner of site No. 2308 secured a sale deed dated 25th July 2005 Annexure-H conveying the marginal land of 84.18 Sq.M. for a sale consideration of Rs. 2,65,167/- while yet another adjacent neighbour, owner of site No. 2307 was directed to pay Rs. 1,81,642/- as consideration for sale of marginal land measuring 26.53 Sq.M. as indicated in the letter dated 18.4.2001 Annexure-J.

Respondent-BDA by letter dated 4.3.2011, Annexure-L, called upon petitioner to pay Rs. 16,43,461/- towards value of 81.43 Sq.M. of marginal land at the rate of Rs. 20,183/- per Sq.M. and Rs. 26,29,538/- being the penalty at the rate of Rs. 32,292/- per Sq.M. towards construction of a building on the marginal land, totaling to Rs. 42,72,999/-, for obtaining a conveyance of the marginal land.

Petitioner''s request to reduce the said amount led to endorsement dated 14.7.2011 Annexure-Q, reiterating the very same demand leading to institution of Writ Petition No. 34169/2011 whence, a learned single Judge, by order dated 8.9.2011, directed petitioner to deposit 50% of Rs. 16,43,461/- being the value of the property in question, which was complied with, by deposit of Rs. 8,21,750/- on 29.9.2011, evident from Annexure-T, enclosed to the letter Annexure-S. That petition was allowed by order dated 30th January 2012, Annexure-T1 and the proceeding remitted for consideration afresh, where afterwards, the BDA by endorsement dated 13.6.2012, Annexure-V, directed petitioner to pay the very same amount as calculated in the earlier demand which when called in question in WP No. 28516/2012, was disposed of on 21.2.2013, Annexure-Z, recording the submission of learned counsel for the parties that they had brought about an amicable settlement.

The Deputy Secretary of the respondent-BDA though intervened in the matter to bring about a settlement, it is asserted, nevertheless, by letter dated 10.2.2014, Annexure-AA, reiterated the very same demand. The Commissioner recommended Rs. 16,43,461/- being the value of the marginal land and Rs. 1,94,404/- towards 10% of Rs. 18,37,865/- towards penalty for unauthorized construction, totaling to Rs. 18,37,865/-, which when placed before the Board on 23.12.2013, was not accepted and petitioner was directed to pay Rs. 42,72,999/-. Hence this petition.

Petition is opposed by filing statement of objections of respondent-BDA admitting the fact of allotment of site, the execution of lease-cum-sale agreement as well as conditional sale deed, delivery of possession, institution of writ proceedings, making of applications dated 19.11.1998 and 25.12.2002 as also 24.6.2004 for allotment of marginal land. In addition, BDA admitted the attempts made on several dates by the petitioner for evaluating marginal land as well as penalty for unauthorised construction over the marginal land. It is denied that petitioner along with neighbours had jointly made representations 18.11.1993, 14.12.1989 and 1.11.1994, Annexures-D, E and F, in the absence of acknowledgments. It is admitted that the marginal land was allotted to the owner of site bearing Nos. 2308 on 7.3.2001 and to the owner of site No. 2307 on 18.4.2001, while marginal land was allotted to petitioner only on 30.10.2010. In addition, it is stated that the value of marginal land measuring 81.43 Sq.M. is Rs. 16,43,461/- calculated at Rs. 20,183/- Sq.M. being 2.5 times of 25% of the prevailing market rate of Rs. 3,000/- per Sq.ft. being Rs. 750/- per Sq.ft. or 25% of Rs. 32,292/- being Rs. 8,073/- per Sq.M. while fine of Rs. 26,29,538 for 81.43 Sq.M. of unauthorized construction, is calculated at the market rate of Rs. 32,292/- per Sq.M. At paragraph 9, it is stated that petitioner having appeared before the Commissioner, decided to recommend reduction of the amount towards penalty, which petitioner accepted and agreed to pay Rs. 16,43,461/-, nevertheless, the recommendation was not accepted by the Board.

Sri K. Subba Rao, learned senior counsel for the petitioner, reiterates the averments in the memorandum of writ petition. In addition, it is submitted that petitioner would be satisfied with an order directing BDA to accept Rs. 4,27,507/- being the value of the marginal land measuring 81.43 Sq.M. as in the case of owners of site Nos. 2307 and 2308, Annexures-H and J, i.e., calculated at the rate of 2100 Sq.M. x 2.5 times and as regards, penalty over unauthorized construction of 18.5 Sq.M. being 1/4th of marginal land at the aforesaid rate equivalent to Rs. 97,125/-.

Per contra, Sri K. Krishna, learned counsel for BDA seeks to sustain the resolution of the Board as being well-merited, fully justified and not calling for interference. According to learned counsel although petitioner filed an application during the year 2003 and not prior, nevertheless, decision was taken during the year 2010 and therefore, market value of the land as in the year 2010, ought to be paid by the petitioner so also, penalty based upon the prevailing market value of the land as on that date.

Having heard learned senior counsel and counsel for respondent-BDA, perused the pleadings, examined the endorsements and the demand notices, what falls for consideration is: "Whether BDA was justified in demanding Rs. 42,72,999/- from out of which Rs. 16,43,461/- is towards value of marginal land measuring 81.43 Sq.M. at 2.5 times Rs. 8073/- per Sq.M. being 25% of Rs. 32,292/- and penalty of Rs. 26,29,538/- for unauthorized construction on the said land measuring 81.43 Sq.M. calculated at Rs. 32,292/- Per Sq.M. being the prevailing market rate?".

Neither the Bangalore Development Authority Act, 1976 nor the rules framed thereunder, provide for allotment of "marginal land" or the rate at which such marginal land adjacent to sites is to be conveyed to allottees of said sites, much less penalty for contribution of building on marginal land. In the absence of guidelines, the Board resolved to fix average of the auction rate during the year 2010 as the market rate of marginal land. In the absence of rule or a guideline for fixing the said rates, it cannot but be said that such fixing of rates is arbitrary and by no stretch of imagination is justified.

Rs. 32,292/- per Sq.M. is said to be value of the marginal land during the year 2010 when the Board on petitioner''s representation of the year 2003, took a decision although, there is material wanting over the petitioner''s claim to have filed an application way-back during the year 1983, 1984, and 2001. Even if it is assumed that petitioner''s representation is of the year 2003, it is unfortunate that the BDA did not respond to his request during the year 2003 itself. Had the Board taken a decision during the year 2003, petitioner would have to pay an amount equal to the market value of said marginal land as on that date, which certainly was not Rs. 32,292/- per Sq.M.

In the backdrop of these facts, Sri K. Subba Rao, learned senior counsel submits that the rate fixed for marginal land attached to site Nos. 2307 and 2308, may be reckoned as a correct measure. As regards site No. 2308, during the year 2005, in terms of sale deed Annexure-H, the market value for 84.18 Sq.M. is shown as Rs. 2,65,167/- while in respect of site No. 2307, the market value of 26.53 Sq.M. is shown as Rs. 1,38,390/- as on 2007 Annexure-J. If these two rates are taken into consideration then the BDA was not justified in reckoning market value of the marginal land at Rs. 32,292/- per Sq.M.

In the facts and circumstances, it is appropriate to direct the BDA to reckon the market value of the marginal land measuring 81.43 Sq.M. at the rate of Rs. 2,100/- per Sq.M. and multiply it by 2.5 times i.e., Rs. 4,27,507.50.

As regards penalty for the unauthorized construction of building on BDA land by the petitioner, there is no justification to levy Rs. 26,29,538/- calculated at Rs. 32,292 per Sq.M. of marginal land measuring 81.43 Sq.M. since such valuation cannot be equated to damages for construction of a building measuring 18.5 Sq.M. on marginal land. In the considered opinion of the court, the demand by the BDA for Rs. 26,29,538/- towards unauthorized construction is astronomically, unjust, unreasonable and arbitrary. In the facts and circumstances, not making it a precedent, ends of justice would be met by reckoning damages at the rate of Rs. 2,100 per Sq.M. on constructed area of 18.5 Sq.M. i.e., Rs. 38,850/-.

In the result, this petition is allowed in part and a direction shall ensue to BDA in the terms noticed supra. Compliance by 31st October 2015.