Vinay Bhusan Das vs Kolkata Metropolitan Dev. Authority & Ors

Protik Prakash Banerjee, J

Mr. Partha Sarathi Basu, learned advocate appearing on behalf of the respondent no. 1, has very fairly submitted that the petitioner has deposited the entire sum according to the order of the coordinate Bench. Therefore, bona fide of the writ petitioner have been sufficiently borne out by the conduct of the writ petitioner.

Since the deposit has been made without prejudice to the rights and contentions of the parties necessary concomitant of the order dated September 23, 2015 is that no effect can be given to the notice impugned in the writ petition. Mr. Saptangsu Basu, learned senior advocate for the petitioner, has taken me to the petition to show that in terms of the letter of allotment which is part of Annexure P1 the total price that is to say consideration for the leasehold was Rs.1,65,000/‐. He has drawn my attention to Clause 2(iii) at page 42 of the writ petition which states as follows:

"2(iii) At the own cost of the LESSEE within five years from the date hereof or within such further time as te Authority may at its option allow in writing on sufficient and reasonable grounds, to erect, construct and complete a house or building on the demised land for being used for residential purposes with boundary walls, sewers and drains in accordance in accordance with plans, sections and specifications as may be approved by the appropriate body according to the rules and regulations framed for the purpose."

According to Mr. Saptangsu Basu, learned senior advocate, this indenture in which the said covenant is incorporated does not permit the charging of penal interest or any amount as a condition for granting of extension of time. He has also taken me through the parent statute of the respondent to show that the statute does not permit the respondent no. 1 to impose any such condition for the purpose of granting extension of time to complete construction. He also made me go through exact words of the said clause extracted above and has submitted as follows:‐

(i) The period within which the construction has to be made is not limited to 5 years but also to such further time as the authority may allow at its above in writing.

(ii) Such further time shall be granted if sufficient and reasonable ground are shown.

(iii) The erection, construction or completion of the house or building at the demolished land for residential purposes with boundary walls, sewers, sections, specifications as may be approved by the appropriate zonal authority in this case the Kolkata Municipal Corporation.

Therefore, if the petitioner can show reasonable and sufficient ground including delay by the corporation in sanctioning the plan as the cause for any building construction within 5 years the respondent can certainly choose not to extend time if appropriate reasons are given but it cannot while granting time impose any penal cost or any cost whatsoever from the petitioner whether under statute or under contract.

In the instant case Mr. Saptangsu Basu, learned Sr. Advocate, has shown me that this provision as above not to allow extension was not adopted by the respondent authority which appears clearly from the letter dated March 09, 2010 whereby Kolkata Metropolitan Development Authority (for brevity, "KMDA") granted further time of two years from March, 2009 onwards to complete the construction without stipulating payment of any sum. Annexure‐P was issued after considering the reason given by the petitioner for extension of time and the reply to the notice to show cause issued by the respondent no. 1. It was only thereafter that the series of correspondence asking for increasing rates of penalties and that too on the basis of valuation of the land as on the date of the payments started to be made.

Mr. Saptangsu Basu, learned Sr. Advocate, has taken me through the affidavit‐in‐ opposition filed by the respondent no. 1 where, inter alia, at paragraph 4 sub‐paragraphs (n) and (o) at page 11 the respondent authorities have disclosed an unilateral policy decision which appears to have been taken at the minutes of the meeting of the Pricing Committee of the respondent no. 1 held on February 12, 2019. Pages 29 and 30 of the said affidavit‐in‐opposition pertains to the present dispute, the same is set out herein below :‐

"Agenda No.4 Panel charge for extension of time.

Lease deed/ license deed executed with the lessee specify a certain period for commencement of execution of their project. In many cases, both residential plot holders and bulk land allottees cannot start the construction within the specified time. It is felt that granting them extension of time with some penal charges will ensure greater seriousness of the work. (9th LFAC proposed suitable amendment in LF Policy for utilisation of the penal change clause.)

After detailed deliberation, the following rates were approved for extension of time for commercial and non‐commercial users.

Sl. No

Category of plots

Extension upto 5 years

Extension from 5‐10 years

Extension beyond 10 years

1.

Commercial

2% of the rate at which the land was allotted to them

5% of the rate at which the land was allotted to them

10% of the rate at which the land was allotted to them

2.

Non‐ Commercia

Not more than 2% of the rate at which the land was allotted to them

Not more than 5% of the rate at which the land was allotted to them

Not more than 10% of the rate at which the land was allotted to them

"

It is needless to mention that the allotment made to the petitioner was long before February 12, 2009. Page 33 of the affidavit‐in‐opposition shows that original letter of allotment was given on July 19, 1993 and the entire amount was paid after the balance amount was paid on July 06, 1994 whose receipt has been issued by the respondent no. 1 on July 14, 1994. The indenture was executed and registered on September 19, 1995. Therefore, at the time when the indenture was made and transfer of to the leasehold to the petitioner was made the said alleged policy decision was not there. The respondent is trying unilaterally to apply its policy decision to the petitioner even though there was no way that the petitioner could have known the intention of the respondents to do so when accepting indenture. This is not just a game of changing the rule of the game after play has begun but even changing the level playing field in favour of one of the parties being the lessor at the cost of the lessee in respect of the land which the lessor holds as part of the material resources of the community which it is under a public trust to distribute for the common good. Such arbitrariness cannot be countenanced.

That apart, even if I go by the said policy decision this would have been applicable as I have held, yet because the premises concerned are being used for non‐commercial that is to say residential purpose on the face of the said policy decision, inter alia, at page 29 even for extension beyond 10 years the respondent, KMDA can charge not more than 10% of the rate at which the land was allotted to them. That is to say the material date of assessing penalty on the land would be date of allotment and not date of levy of the demand. On that ground also the impugned demands are jurisdictionally flawed and flawed fatally. Since, therefore, neither the statute not the contract having a public law element since it is in the nature of redistribution of common resources of the community resources permits the respondent to charge such amounts or any amount particularly after they have allowed extension initially without any stipulation as to payment of any sum the demand is ex facie illegal.

Mr. Saptangsu Basu, learned Sr. Advocate, submits that the petition deserves to be allowed and the demands to be quashed.

The effect of the aforesaid is that the unilateral policy which was never communicated to the petitioner which could not, therefore, have known about it.

Mr. Partha Sarathi Basu, learned advocate appearing on behalf of the respondent no. 1 has noted the submissions and has started his argument by submitting that the writ petition is not maintainable, and seeks to enforce contractual clause. He submits that this is a case where there has been breach of covenant of the indenture of lease for which re‐entry has been resorted to and that too after giving a chance to the petitioner to make payment failing which the cancellation amounting to re‐entry shall be made.

Mr. Partha Sarathi Basu, learned advocate appearing on behalf of the respondent no. 1, submits that the policy decision which was taken in a meeting held in the chamber of the then Mayor and where only the officers of KMDA were present would nonetheless automatically be known to the petitioner though the mode of acquiring this knowledge is not specified by Mr. Partha Sarathi Basu, learned advocate appearing on behalf of the respondent no. 1. Since the Court cannot officially recognise the existence of telepathy I am afraid I cannot accept this submission. For the petitioner to know about a policy decision it must at least be publicised. There is no allegation in the affidavit in opposition that this policy decision was published on the website of KMDA or in any Government portal which would deemed to be constructive notice to the petitioner. So far as question of the matter being, inter alia, in the realm of the private contract is concerned I am afraid with the law appears to be well settled that a lease deed or allotment of land by way of an allotment letter leading to an indenture of lease by the KMDA has been held not to be a matter of mere contract but a contract having statutory flavour.

Mr. Partha Sarathi Basu, learned advocate appearing on behalf of the respondent no. 1, submits as the point is that this is not a statutory contract. I already deal with this aspect in the matter in the earlier portion of my observation as to how contracts entered into by the respondent no. 1 and the creature of statute in discharge of its duty of being in a position of public trust relating to land being a material resources of the community partakes of statutory flavour and must be deemed to have usual restriction of being compelled to act in terms of law and in a manner which is free from arbitrariness.

Mr. Saptangsu Basu, learned senior advocate for the petitioner, shall cite judgment on this point on the next sitting as will also Mr. Partha Sarathi Basu, learned advocate appearing on behalf of the respondent no. 1.

As a last chance the matter is fixed on August 29, 2019 at exactly 03.00 P.M.

Urgent photostat certified copies of this order, if applied for, be made available to the parties upon compliance of the requisite formalities.