Amol Rattan Singh, J.@mdashThis bunch of appeals has been filed by the Administration of the Union Territory, Chandigarh, assailing the judgment of the learned Single Judge, dated 7th April, 2011, passed in C.W.P. No. 12796 of 2008, (titled as Ms. Neera Goyal v. Chandigarh Administration & Ors.) and connected cases. Along with the bunch of appeals filed with the Administration (and one by a writ petitioner), C.W.P. No. 1279 of 2008 has also been tagged. We have dealt with it separately, at the end, as the issue, though definitely connected with the main issue of rate of conversion fee, also has an additional basic issue involved in it. The facts, largely common, were referred to from L.P.A. No. 2053 of 2011 by the learned Senior Standing Counsel for the appellant; however, since the learned Counsel for the respondents had addressed arguments on the general issue of conversion fee, the matter has been dealt with by us on the issue of the validity of the enhanced conversion fee as a whole and not from any particular appeal before us.
2. The respondents in these appeals are those persons who sought conversion of usage of their industrial plots for commercial purposes, in terms of a scheme notified by the Administration, i.e. the present appellant, on the 19th of September, 2005, laying down certain terms and conditions for such conversion. Such conversion could be granted, subject to all conditions, upon payment of a fee. As per Clause 2 of the Notification, it was to come into force from the date of its publication in the official gazette and was to remain in force for a period of 2 years.
Since the only issue in these cases is with regard to the Conversion Fee to be paid, for conversion of usage of the plots, we will refer to only that part of the scheme, as is concerned with the same.
3. The scheme was termed as the "Chandigarh Conversion of Land Use of Industrial Sites into Commercial Activity/Services in Industrial Area, Phase-I and II, Chandigarh Scheme 2005" and was promulgated under the Capital of Punjab (Development and Regulation) Act, 1952.
4. The relevant clauses of the scheme are reproduced hereunder:-
"FINANCE DEPARTMENT
NOTIFICATION
THE 19TH SEPTEMBER, 2005
No. 28/8/51-UTFI (3)-2005/6658 - In exercise of the powers conferred by Section 7 and Section 22 of the Capital of Punjab (Development and Regulation) Act 1952 and the rules made thereunder the Administrator, Union Territory, Chandigarh is pleased to make the following scheme for conversion of land use of industrial activity to commercial activity namely:-
(1) The scheme may be called "Chandigarh Conversion of Land Use of Industrial Sites into Commercial Activity/Services in Industrial Area, Phase I and Phase II, Chandigarh Scheme, 2005".
(2) It shall come into force from the date of its publication in the official gazette and shall remain in force for a period two years.
(3) The Designated Agency for the scheme will be Chandigarh Housing Board.
(4) In this scheme, unless the context otherwise requires - All words and expressions used in the scheme but not defined hereunder shall have the meaning attached thereto in the Capital of Punjab (Development and Regulation) Act 1952 and the rules made thereunder.
(i) "Industrial site" means site allotted/sold/leased out by the Chandigarh Administration for whatever purposes in Phase-I and Phase-II, Industrial Area, Chandigarh.
(ii) "Conversion Fee" means the fee fixed by the Chandigarh Administration in this scheme.
(5) Provisions for converting land use of an Industrial Site into Commercial:-
Commercial Activity can be started in industrial plots after payment of conversion fee either by converting the land use or by fresh construction in accordance with guidelines of the architectural controls attached at Annexure "A".
(6) Conditions for conversion of land use of Industrial sites to Commercial.
(i) xxxx xxxx
(ii) The conversion fee to be paid by the applicant who applies for conversion will be 50% of the average price of the commercial sites fetched in the auctions held in the last 3 years. The fee will further be reduced by 50% in view of location and disadvantage of sites in the Industrial Area Phase-I @ II. 10% concession shall be given to those applicants who apply for conversion within one year of the notification of the scheme. For purposes of calculation, the FAR allowed for commercial properties auctioned by the Estate Office in the last 3 years is taken as 3.0 and the FAR after conversion in the Industrial Area, Phase-I & II will be 2.0. See Annexure "C" (statement showing calculation of conversion fee).
(iii) xxxxxx
xxxx xxxx xxx xxx
5. Thus, Conversion Fee was to be 50% of the average price fetched for commercial sites, in auctions held by the Administration, in the last 3 years. Such average price was to be further reduced by 50%, in view of the fact that the plots in question were in the Industrial Area and not in a commercial area of the city, (which is where the auctioned plots were located).
A further concession of 10%) was to be given on the fee so calculated, to those who applied within one year of the notification of the scheme. However, that part not being in issue, is not relevant for the purpose of these cases.
6. What is of significance is the last line of Clause 6(ii) stating that Annexure ''C'' (of the notification) should be seen, showing calculation of Conversion Fee. Annexure ''C'' is reproduced hereinunder:-
"AVERAGE PRICE ON THE BASIS OF LAST THREE YEARS AUCTION OF COMMERCIAL SITES SOLD BY THE ESTATE OFFICE.
i. Average price shown above is the conversion charges for sites in the Industrial Area.
ii. Maximum FAR of commercial properties in the city is 4.0.
iii. These charges re discounted by 50% as the maximum FAR allowed after conversion in the Industrial Area, Phase I & II is 2.0.
iv. These charges are further discounted by 50% in view of locational disadvantage of site in the Industrial Area, Phase I & II.
v. 10% concession is given to those applicants who apply for conversion within one year of the notification of the scheme."
7. Clause 7 of the Notification further stipulated that the fee could be paid upfront in lump-sum, or in 2/3/4/5 installments.
8. Clause 9 stated that the Conversion Fee would be charged for the whole of the size of the plot.
9. On the 18th of September, 2007, i.e. on completion of 2 years of the scheme, the appellant Administration, exercising its powers under the Capital of Punjab (Development and Regulation) Act, 1952, i.e. the same provisions under which the scheme had been notified, issued another Notification further extending the period of the scheme for 6 months, i.e. upto 18th March, 2008 on the same terms & conditions.
10. Thereafter, on 18th March, 2008, yet another Notification was issued, again extending the period of validity of the scheme upto the 18th of September, 2008.
11. On the 14th July, 2008, an order was issued by the Administrator, U.T. Chandigarh, giving therein certain directions for the implementation of the scheme, which is reproduced hereinunder:-
"Chandigarh Administration
Finance Department
ORDER
The Administrator, UT, Chandigarh is pleased to issue the following direction for the implementation of the scheme called ''Chandigarh Conversion of land use of Industrial Area, Phase I & II, Chandigarh Scheme, 2005, notified vide No. 28/8/51-URFI(3)-2005/6658 dated 19.9.2005.
1. The applicants who have submitted the applications for the conversion of Industrial sites into commercial activity complete in all respect before 17.12.2007 and which remained undecided and were decided subsequently are allowed conversion at the rate as applicable on 17.12.2007 i.e. prior to last auction held.
2. In case of applications received on and after 18.12.2007 the conversion fee applicable shall be calculated by taking into consideration all auctions of last three auction years (years in which no auction took place are not to be counted while calculating three years) and not the auctions held in the last three years because in that case there is practically only one auction and the spirit of scheme to have multiple rates from multiple auctions shall be defeated.
Dated: 14.7.2008
Sd/- Sanjay Kumar, IAS
Finance Secretary,
Chandigarh Administration."
12. Thus, all such persons, seeking to avail the scheme, as had submitted their applications complete in all respects, before the 17th of December, 2007, were to pay conversion fee as already calculated in Annexure ''C'' of the of the original Notification dated 19th September, 2005, and those who submitted the applications on or after 18.12.2007, were to pay the fee, to be calculated as per the last 3 auctions years, not counting those years in which no auction had taken place.
13. The significance of the date, 17th December, 2007, was that on that date, for the first time after 11th December, 2004, auction of a commercial property took place in Chandigarh. Thus, as per the Administration, in terms of Clause 6(ii) of the original notification dated 19th September, 2005, the average of the auction price, in auctions conducted in the last 3 years, would necessarily have to be arrived at after including the last auction held on the 17th December, 2007 also, for all those who applied for conversion after that date.
It is this order dated the 14th of July, 2008, that came to be challenged by the respondents before us, i.e. the writ petitioners before the learned Single Judge.
14. As culled out from the judgment under appeal, it was argued by the present respondents, that, firstly, the conversion has been retrospectively charged with effect from 18.12.2007 vide the impugned order dated 14.07.2008, thus taking away accrued rights, and as such, the order is bad. Secondly, the impugned order was only an office order which could not amend the notification earlier issued, thereby overtaking a statutory scheme. Another argument which was raised, was that since the fee had already been deposited by some of the respondents (petitioners before the Single Bench), prior to the passing of the order dated 14.07.2008, they could not be, at that stage, asked to pay an enhanced fee.
15. After considering the rival submissions, the learned Single Judge formed an opinion that the crucial issue was as to how the period of 3 years is required to be calculated, since the conversion fee that was to be charged was on the basis of the average price of a commercial site, fetched in the auctions held in the last 3 years.
16. Not agreeing with the stand of the Administration, to the effect that the three year period had to be counted from the date of application, the learned Single Judge eventually held that though the method of calculation was not wrong, i.e. it would be the auctions held in the last three auction years which would determine the average fee, however the three years, were not to be counted from the date of application, as that would have no relevance, once the scheme came into operation for a particular period given in the notification and, as such, three auction years would have to be necessarily calculated from the date of notification. Hence, as per the impugned judgment, since the initial notification was issued on 19.09.2005 and the auctions prior thereto were held in the years 2004, 2003 & 2002, it was only those three years as would be taken into account with regard to the original notification and thereafter, since the scheme was extended on the same terms and conditions on 18.09.2007, the date for determining the last three years would be that date (18.09.2007), since the scheme was to hold good for 6 months only, i.e. upto 17.03.2008.
17. Thus, as per the judgment under challenge, though the average price would mean 50% of the price calculated as an average of the price fetched in the auctions held in the 3 last years, the calculation to see which three years would be taken into account, would be from the date of extension of the notification and each subsequent notification extending the scheme and could not be read to mean that it would be from the date of application made by an applicant to the Scheme.
18. He did not agree with the submission of the writ petitioners to the extent that the same terms and conditions would mean that conversion fee would remain constant, but held that the fee would change taking into account the auctions held in the last three years, immediately prior to the notification in question. Therefore, to the extent that any accrued right was taken away, the petitioners'' (present respondents'') contention was rejected. However, the writ petitions were allowed on the ground given above, viz. that since the auction held on 17.12.2007 was on a date after 18.09.2007, during the validity of the extended'' period of the scheme, such auction could not be taken into account.
19. Mr. Sanjay Kaushal, learned Senior Standing Counsel, Chandigarh Administration, while challenging the decision of the learned Single Judge, argued on the following lines:-
(i) That, in the first place, the conversion from industrial usage of a plot in industrial area, Chandigarh was allowed only as a concessionary, beneficial scheme, to help the owners of the plot, as industrial activity was not doing as well as commercial activity in the past few years and as such, it was felt that such a scheme can be floated, subject to the terms and conditions contained therein.
Thus, the argument is that a concession given is to be strictly construed as per the terms & conditions thereof and does not give the applicant a license to dictate the terms and conditions thereof.
(ii) That the extension of the policy for a further period of 6 months vide notification dated 18.09.2007, was on the "same terms & conditions", not on the same fee. As such, since conversion fee has been defined in sub Clause (ii) of Clause 4 of the Notification dated 19.09.2005 as the fee fixed by the Administration in the scheme and, further that as per Clause 6(ii), the method of calculation of the fee is given and it has specifically been stated therein, that for the purpose of calculation, Annexure "C" is to be seen, and Annexure "C" calculates the fee by that methodology, showing the price fetched in the previous 7 auctions, he, therefore, contended that, the result of the calculation would change the moment another auction took place. Hence, as per Mr. Kaushal, the fee was "dynamic" not "static".
His contention further was that if the fee is to be kept static, the methodology would not have been so elaborately given; the charge would have simply been fixed at a particular price and would have remained so till such price was changed. Thus Annexure "C" of the scheme, only shows the methodology of calculation of the conversion fee and not a permanent conversion fee.
(iii) That the Administration, in fact, had acted fairly by clarifying in the impugned order dated 14.07.2008 that it would be the last three auction years that would be taken into account for the purpose of calculation of average price and not the actual 3 preceding years. The contention is that if only the last three preceding years were to be taken into consideration, then, since there was no auction held in the years 2005 & 2006, the average price would have to be calculated only taking into account the years 2005, 2006 & 2007, in which auction took place only on 17.12.2007 and, as such, the average price would obviously then be only the price fetched in the auction held on that date, thereby increasing the average price manifold, since it would not take into account the auctions held at lower prices in previous years.
In a nut-shell, his contention is that it was actually beneficial to the respondents herein that the clarification was given by the Administration, in the impugned order, to the effect, that it would be the last three auction years and not the actual preceding years which would have to be taken into account.
(iv) That this Court would not interfere in favour of speculators and "fence sitters", who exercised their option for conversion only towards the fag end of the scheme, after its extension, when they saw land prices increasing. Thus, though the scheme was floated in September 2005, the respondents herein are those who chose to exercise their option only after December 2007 and, mainly, just before the closing of the extended validity of the scheme, between January and March 2008, even though it had been in force for almost 2 years by then. As such, Mr. Kaushal contends that the respondents do not deserve the indulgence of this Court, exercising jurisdiction under Article 226, as they are basically opportunists.
(v) It was next contended by Mr. Kaushal that the issue of extension of the scheme, along with ancillary issues like waiving of interest on delayed payment of conversion charges etc., raised by various applicants, was subject matter of discussion in the Administration since July/August, 2005, i.e. about 1 or 2 months prior to the expiry of the scheme originally notified in September 2005. As a representation from an applicant was received with regard to the reduction of the conversion fee, that issue, along with other issues with regard to the zoning plan etc., were discussed before extension and even after extension was ordered vide notification dated 18.09.2007. However, at that stage, the issue of an increase of conversion fee was not discussed as there was no doubt with regard to the formula by which the fee was to be charged and since there had been no change in the ground reality, i.e. there was no further auction held during the validity of the original scheme, between September 2005 and September 2007, the question of discussion on another auction does not find any mention in the record.
It was mainly only after the auction actually took place on 17.12.2007 that the issue of an enhanced fee came up, though the issue was touched upon in October 2007, when a file noting was made that the Chandigarh Housing Board (the Nodal Agency for the conversion scheme) was calculating conversion fee "according to the rates/formula" decided by the Finance Department U.T. Chandigarh.
20. His whole case, therefore, is that it was not the fee amount per se, that was intended to be fixed but only the rate or formula for calculating it which had been fixed vide Annexure ''C'' and, as such, the contention of the respondents, to the effect that the fee was finally fixed as was given in that Annexure, is wholly misconceived.
21. Per contra, all learned Senior Counsel who appeared before us for the respondents in these appeals, had addressed arguments on different aspects, which we will enumerate herein as per each Counsels'' contention.
22. Mr. Arun Palli, learned Senior Counsel appearing for the respondents in some of the LPAs, submitted as detailed hereinafter.
23. That the scheme came into force, as per Clause II thereof, from the date of its publication in the official gazette, i.e. from 19.09.2005 and was to remain in force for a period of 2 years and the fee was fixed in the scheme as per Clause 4(ii) which states that "conversion fee means the fee fixed by the Chandigarh Administration in this scheme." Thus, as per Mr. Palli, it was a fee "fixed" vide the said notification and could not be changed.
24. That the conversion fee having been fixed is further strengthen by condition No. 6(ii) which stipulates that the conversion fee was to be taken as 50% of the average price of the commercial sites fetched in the auction held "in the last three years".
25. Thus, his contention is that it was only the auctions held in the previous 3 years from the date of notification, i.e. 19.09.2005, that could be taken into account and nothing further. As such, Annexure "C", according to him, fixed the price once and for all and could not be changed as the figures given in the said Annexure were not illustrative or imaginative, but real figures.
26. He further contended that it was because of the fact that the scheme was valid for only 2 years that there was fixation of fee, on which a 10% concession was also to be availed of by those who applied within one year.
27. He thereafter drew our attention to the notification dated 18.09.2007, by which the scheme was extended for a period of 6 months.
The said notifications reads as under:-
"CHANDIGARH ADMINISTRATION
FINANCE DEPARTMENT
Notification
The 18th September 2007
No. 28/8/51-UTFI(3)-2007/5938 - In exercise of the powers conferred by Section 7 and Section 22 of the Capital of Punjab (Development and Regulation) Act 1952 as adapted by the Punjab Reorganization (Chandigarh) (Adaptation of Laws on State and Concurrent subjects) Order 1968 and all other powers enabling him in this behalf, the Administrator, Union Territory, Chandigarh is pleased to extend the scheme namely "Chandigarh Conversion of Land Use of Industrial Sites into Commercial Activity/Services in Industrial Area, Phase I and Phase-II, Chandigarh Scheme, 2005" notified vide No. 28/8/5l-UTFI(3)-2005/6658 dated 19.9.2005, for a further period of six months i.e. upto 18.3.2008 on the same terms and conditions.
S.K. Sandhu
Finance Secretary
Chandigarh Administration"
28. His contention, therefore, is that the term "on the same terms & conditions" specifically stipulates that there would be no change in the terms and conditions and, as such, the fee being an essential condition, the same also could not be changed, especially as the scheme was not notified afresh, but only extended by notification.
In fact, this is the main plank of the arguments of all learned counsel appearing for the respondents before us.
29. Mr. Palli further argued, that the respondents before us were those who had applied within the first extended term of the scheme, i.e. between 18.09.2007 and 18.03.2008. As such, they could not been affected by an order issued on 14.07.2008.
30. He further contended that the concept of taking the date of application as the date that would determine as to whether the conversion fee originally calculated was to be paid by the applicant or the subsequent calculation was to be paid, was a concept which was introduced by the applicant-Administration for the first time only vide the order dated 14.07.2008, i.e. during the period of the second extension given vide notification dated 18.03.2008 and not before that; hence it was a novel ideal which come as an after thought, only for the Administration to earn more revenue, against the intention of the scheme originally notified.
31. As regard Mr. Kaushals'' contention that the issue of change of terms and conditions had been discussed at various levels as per the record, Mr. Palli, submitted that that would be meaningless, in as much as the notification by which the scheme was extended on 18.09.2007 did not set down any new fee and simply extended the scheme on the same terms and conditions. He therefore, further, contended that since there was no mention of conversion fee being charged according to the "date of application", there was no confusion in the mind of the Administration as it was known to it, that the fee was Rs. 20,000/-, as per the formula mentioned in Annexure "C" of the original notification.
32. Mr. Palli further drew our attention to the Notification dated 11.07.2005 by which the scheme was originally to be promulgated, though it did not come into force, because it was never published in the official gazette as was required by Clause (ii) thereof. He specifically pointed to Clause 6(ii) of the July notification, to state that the issue of conversion fee was obviously discussed in detail by the Administration, because there is a marked difference between what was proposed to be the conversion fee as per that notification and what was eventually fixed as the conversion fee, by the notification which actually took effect on 19.09.2005.
Sub-Clause (ii) of Clause 6 of the 11.07.2005 Notification reads as under:-
"(ii) The conversion fee to be paid by the applicant who apply for conversion during the first year of the scheme shall be 40% of the average price per square yard for all the auctions held by the Estate Officer for commercial sites during the last three years. Applications during the second year will attract conversion fee at the rate of 50%. These charges/fee shall be deflated in proportion to the minimum FAR permissible. For purposes of calculation it shall be taken that the FAR allowed for commercial properties auctioned by the Estate Officer is three. See Annexure "C" (statement showing calculation of conversion fee)."
On the other hand, as already reproduced earlier, but for convenience is being reproduced again, sub-clause (ii) of Clause 6 of the 19.09.2005 Notification, reads as under:-
"(ii) The conversion fee to be paid by the applicant who applied for conversion will be 50% of the average price of the commercial sites fetched in the auctions held in the last 3 years. The fee will further be reduced by 50% in view of location and disadvantage of sites in the industrial Area Phase-I & II. 10% concession shall be given to those applicants who apply for conversion within one year of the notification of the scheme. For purposes of calculation, the FAR allowed for commercial properties auctioned by the Estate Officer in the last 3 years is taken as 3.0 and the FAR after conversion in the Industrial Area, Phase-I & II will be 2.0 See Annexure "C" (statement shown calculation of conversion fee)."
The contention, therefore, is that since the Administration has consciously applied its mind twice to the same issue, the intention was very obvious that the fee was to remain static as per the notification which eventually came into force.
In this regard he also drew our attention to the contention made in Para No. 9 of C.W.P. No. 12796 of 2008 filed by the respondent in L.P.A. No. 2053 of 2011, wherein a specific plea to the above effect has been taken that it was only upon due deliberation and after approval by the Administrator, U.T. Chandigarh, that the scheme was extended for 6 months on the same terms and conditions and, as such, the fee could not be changed, being a change in the terms and conditions.
33. He next drew our attention to the noting of the Finance Secretary, Chandigarh, dated 14.09.2007, which discusses the representation made by the Association of Chandigarh Federation of Small Scale Industries and Chamber of Chandigarh Industries. In the said noting, the proposal for extending the scheme for a period of 2 years was considered to be too long for extension of the policy and a proposal for another 6 month extension, on the same terms, was mooted.
Mr. Chetan Mittal, learned Senior Counsel appearing for private respondents in some of the LPAs, while addressing arguments, had also pointed to this issue and though we are dealing with his arguments separately, it is necessary to incorporate the following part of his arguments at this juncture itself.
He had submitted that upon the Finance Secretary proposal to extend the policy for another 6 months, on the same terms and conditions, the Advisor to the Administrator had specifically noted that:-
"Extending the policy for a long period means the risks of (a) making it open ended, and (b) a speculative delay in converting while the conversion fee remains static. A period of three to six months may be considered and we may confine ourselves not to grant any further extension of this policy."
Thereafter, the Administrator, U.T. Chandigarh, had opined that 6 months is an adequate time for extension of the scheme and, as such, the notification was issued.
34. Mr. Palli, thereafter, had further pointed to the letter addressed by the Chandigarh Housing Board, which was the Nodal Agency for implementation of the scheme, addressed to the Estate Officer, Chandigarh Administration, on 20.03.2008, seeking clarification and stating that no notification regarding reduction/enhancement of conversion charges had been received and since applications for conversion had been received till the last date of the extended scheme, i.e. 18.03.2008, along with un-revised conversion fee of Rs. 20,000/- per yard, a clarification was required as to what conversion fee was to be charged from the remaining applicants and from when.
Thereafter, the impugned order dated 14.07.2008 was eventually passed.
35. Thus, the argument of both learned Senior counsel is that, since there was a difference between sub-clause (ii) of Clause 6 of the original scheme proposed to be notified in July 2005 and that which was actually notified in September 2005, the decision taken by the Administration to keep a fixed fee was obviously a conscious one.
36. Mr. Chetan Mittal, Senior counsel, has further pointed out from the record produced in Court by the appellants that letters were written by the President and General Secretary of Laghu Udyog Bharti and also by one Sh. H.S. Mamik, who is the appellant in L.P.A. No. 1125 of 2012, in which reduction of conversion charges has been requested on various grounds. Mr. Mittals'' contention is that, as such, what was understood by the applicants from the notification was that it was a fixed conversion charge and not a floating one and they had been pressing the Administration for a further reduction thereof. It was in this regard, therefore, that he drew attention to the word "Static" used in the noting made by the Advisor to the Administrator on 15.09.2007, as already noted above. On this he further contends that a decision to hold an auction had already been taken in August 2007 and, as such, the observation of the Advisor on not letting the fee to remain static beyond 6 months, was significant, which indicated that the administration was aware that the average price would change in the near future.
37. Mr. Mittal further argued that the reduction of floor area ratio, after conversion of an industrial plot to a commercial plot in the industrial area, as compared to a commercial plot already auctioned, shows that the Administration wanted more participation in the scheme and, as such, had decided to keep the fee static.
38. He next submitted that the application of 6 people had been accepted and conversion letters issued even after 17.12.2007 and that the Administration could not show any decision upto March 2008, to show that a fee more than Rs. 20,000/- per square yard was to be charged, on account of the auction held on 17.12.2007. His contention, therefore, is that this period of approximately 3 months was not on account of any mistake but because of an actual conscious decision taken and, as such, the order dated 14.07.2008 was an after thought that had been retrospectively applied, which could not have been done.
39. He next argued that, as per well settled principles of law, a statute can only be read as per its plain meaning and since conversion fee has been defined to mean the fee fixed in the scheme, no other fee could be read to be applicable as was not stipulated in Annexure "C" of the scheme.
He further submitted that if two meanings are possible to be read from the statute, the one beneficial to the beneficiary has to be applied. Mr. Mittal referred to the notification dated 19.09.2005 as a statute, on the ground that it is subordinate legislation.
40. He also argued that what was promised in the original notification dated 19.09.2005, was acted upon by the applicants, by submitting the conversion fee as calculated therein, and, therefore, the principle of promissory estoppel would apply and, as such, the appellant - Administration was estopped from reneging from its promise, as spelt out in the said notification. In this regard, he had relied upon following judgments to make good his contention:-
1.
2.
3.
4.
41. His next contention was that, as per Section 22 of the Capital of Punjab (Development & Regulation) Act, 1952, a notification would have to be issued again if the fee is changed and, as such, the order dated 14.07.2008 could not supplant or override what was stipulated in the Notification dated 19.09.2005.
42. Next he contended that in all other schemes/orders for conversion from usage of one kind to another, fee is always fixed and not "dynamic". He cited the example of conversion of residential property for the purpose of running nursing home.
Other than the above, Mr. Mittal also submitted along the same lines as Mr. Arun Palli.
43. Coming now to the arguments of Mr. Puneet Bali, learned Senior Advocate who appeared for the respondent in L.P.A. No. 2063 of 2011, filed by the Administration and L.P.A. No. 1125 of 2012 filed by the writ petitioner, against the judgment of the learned Single Judge.
44. At the outset, Mr. Bali has controverted what he calls Mr. Kaushals'' "introduction of a new concept" of a "dynamic fee", which, as per Mr. Bali, is not permissible in any law and as such can''t be a part of the scheme in question.
45. As regards his own contentions, he had drawn attention of this Court to the grievances of the appellant in L.P.A. No. 1125 of 2012, i.e. M/s. Chandigarh Spun Pipe Company, as projected in its writ petition before the learned Single Judge, to the effect that the scheme, according to Mr. Bali, was not implemented in the manner that it was envisaged, inasmuch as, according to the appellant, there is an arbitrary, unfair and unreasonable determination and levy of conversion fee, without taking into account various decisions that were taken, while framing and introducing the scheme.
It is to be noticed here that where as the grievance in the writ petitions filed by the other respondents herein, was primarily against the letter dated 14.07.2008, the grievance of the M/s. Chandigarh Spun Pipe Company, in its writ petition, was also to the formula and methodology incorporated in Clause 6(ii) and Annexure ''C'' of the Scheme. As such, though Mr. Bali had, additionally, also argued on the lines of the other learned counsel, however, the grievance of the appellant in L.P.A. No. 1125 of 2012 was not just to enhancement of the conversion fee but to the method itself, by which the fee was imposed and to the imposition of the original fee at the rate of Rs. 20,000/- per square yard, also.
46. The contention was that, as per a decision initially taken by the Administration, the conversion fee was to be discounted by the following factors:-
i) Discount of 50% to allow for locational disadvantage in industrial area.
ii) Discount of 50% in respect of the reduced FAR allowed in the Industrial Area on account of the reason that the price received during auctions for other parts of Chandigarh City are for a higher FAR.
iii) Discount on account of stricter/stringent zoning in industrial area since only 40% of the total size of the industrial plot is allowed to be covered, whereas in commercial plots 100% coverage of the commercial plot is allowed.
His contention is that though the first 2 of the above three factors was given effect to, the discount on account of the third factor had not been taken into account by the administration.
47. His next argument was the same as that of the other learned counsel, to the effect that the fee was to remain static as per the definition of the term, as given in Clause 4(ii) of the scheme. However, he further drew attention to Clause 10 of the scheme, earlier proposed on 11.07.2005, which was amended slightly and incorporated as Clause 11 of the notified scheme dated 19.09.2005, which stipulated that the conversion fee received by the designated agency (Chandigarh Housing Board), would be kept in a separate account, as a "special fund" in respect of which rules of governance would be framed and got approved from the Government of India and utilized exclusively for the purpose of developing the infrastructure in Phases 1 and 2 of the Industrial Area, or in any other area of Chandigarh, to be specified by the Administrator of the Union Territory.
48. Learned Senior Counsels'' next contention was that the fee was actually envisaged as a compensatory fee and not a regulatory fee, which was to be utilized for the benefit of the payee thereof. Thus, being a compensatory fee, a quid pro quo would have to be shown to have been executed in support of the fund collected, not only with regard to the original fee but also with regard to the enhanced fee and in the absence of or without showing the expenditure of any benefits to the persons from whom the fee had been collected the levy itself was bad in law. In this regard Mr. Bali cited a judgment of a Division Bench of this Court, dated 1.10.2008 in C.W.P. No. 8049 of 2008, titled as M/s. Indian Oil Corporation v. State of Haryana and Another, wherein, quoting from
In this regard Mr. Bali also referred to the judgment of the Apex Court in
He also cited the judgment of
49. In the case of A.P. Paper Mills Ltd., the license fee in respect of the licenses issued for the running of factories, was revised by the Government of Andhra Pradesh from Rs. 10,000/- to Rs. 18,00,000/-, which came to be challenged before the High Court of Andhra Pradesh in various writ petitions.
The High Court formulated various questions to adjudicate upon the matter, as follows:-
1. Whether the fee to be charged under the impugned G.O. amounts to tax or fee?
2. Whether the fee levied has got any Quid Pro Quo?
3. Whether it is exproprietory or exorbitant and if so whether it amounts to tax, but not fee?
4. Whether the impugned G.O. is arbitrary and discriminatory as no guidelines are provided in the Act?
5. Whether there is delegation of power by the parliament to the State Government and the same is excessive, unguided and in violation of provisions of the Constitution of India?
The High Court came to a conclusion that the levy was a fee and not a tax but since the Government was rendering services to the factories, as provided under the Act and also by other acts, therefore, the contention that there is no quid pro quo in the fee collected, is not a tenable plea.
The Supreme Court came to the conclusion that the license fee being charged was not compensatory, but regulatory in character and hence the element of quid pro quo would not have to be proved. Having held that, their Lordships, however, came to a finding that the enhancement was too high and as such quashed the levy, with prospective effect.
Further, it was held that "Compensatory taxes like fees, are always proportional to benefits. They are based on the principles of equivalence. However, a compensatory tax is levied on an individual as a member of a class, whereas a fee is levied on a individual as such".
Still further, it was held that "Reimbursement or recompense are the closest equivalence to the cost incurred by the provider of the services/facilities. The theory of compensatory tax is that it raises upon the principle that if the Government by some positive action confers upon individual(s), a particular measurable advantage, it is only fair to the community at large that the beneficiary shall pay for it".
Thus it was held that "For a tax to be compensatory, there must be some link between the quantum of tax and the facility/services. Every benefit is measured in terms of cost which has to be by compensatory tax or in the form of compensatory tax in other words, compensatory tax is a recompense/reimbursement.
He also drew specific attention to Para No. 18 of the Division Bench Judgment in M/s. Indian Oil Corporation, (supra), in which the conclusion arrived at by the Division Bench was that "the levy has to be for reimbursement for actual or projected expenditure".
Mr. Balis'' contention therefore is, that no quid pro quo having been shown by the Administration, in lieu of the fee charged, the fee itself is an illegal levy.
He further contended that the levy (conversion fee), could also not be termed as a "regulatory fee", being highly excessive and as such, had to be taken to a compensatory fee/tax.
50. Mr. Bali also referred to a judgment of the Supreme Court in
In that case, the decision of the Vice Chairman of the D.D.A., to add a surcharge of 20% on the price of flats to be allotted to registrants, was challenged. This surcharge of 20% was imposed with retrospective effect. A Full Bench of the Delhi High Court upheld the validity of the levy of the surcharge, which decision was reversed by the Supreme Court on various grounds, including that an executive officer, in the absence of any provision in a statute, cannot apply his own decision with retrospective effect, because a delegate is bound to act within the 4 comers of the delegation and not beyond it.
He laid emphasis on para No. 80 of that judgment wherein it was held that a definite price is an essential element of a binding agreement and even if it is stated in the contract, it must be worked out on some premise as was laid down in the contract, as a contract cannot be uncertain or vague as stipulated u/s 29 of the Indian Contract Act, 1872.
He also cited the judgment in
51. The next contention of learned Senior Counsel was that since the initial proposal of the Administration had been to take into account the covered area/FAR allowed in the Industrial Area, vis-�-vis a commercial area, which criteria was later abandoned for the purpose of fee calculation, therefore, if any decision had been taken with regard to the fee to be charged, as on the date of application, that too was consciously omitted.
52. He next argued that where the administration envisaged a "cut off, it was specifically given in the scheme; for example, the 10% concession for those applicants who applied within one year of the notification. Thus, according to him, if the scheme was to be based on a "cut off factor", then it would have been spelt out in the notification it self.
53. Mr. Balis'' next argument is the same as that of the other learned Senior Counsel, to the effect that an accrued right came to be vested in the petitioners by virtue of the Notification of 18.09.2005, fixing the fee at Rs. 20,000/- and such accrued right could not be taken away and, in any case, not retrospectively, as has been done, according to him, vide order dated 14.7.2008.
54. His next argument was also similar to that of other counsel, that the scheme was promulgated under Sections 7 and 22 of the Capital of Punjab (Development and Regulation) Act 1952 and being a statutory scheme, any amendment or declaration to be made thereunder, could only be by way of notification and not by an order as has been done.
55. He further contended that no show cause notice was issued while taking away the right conferred on the applicant/land owner.
56. Mr. Bali further cited the case of
In this regard, he further submitted that in the present case the order dated 14.07.2008 is not even an amendment in the notification and it is only an executive order which in any case cannot be retrospectively applied.
57. The above then, were the detailed arguments submitted by all learned counsel appearing for the respondents in the various appeals. (In the case of Mr. Bali the writ petitioner is also an appellant in L.P.A. No. 1125 of 2012 and a respondent in L.P.A. No. 2063 of 2011).
58. In response to arguments raised by Sarvshri Arun Palli, Chetan Mittal, and Puneet Bali, Senior Advocates, Mr. Kaushal, in his rebuttal, replied to their contentions as below.
That there was no fixation of the fee but only the method of calculation was given in Clause 6(ii) and that the contention to the effect that the fee would have to be taken as fixed, in view of the fact that most/all other schemes give a fixed conversion charge for conversion of usage as in the case of nursing homes etc., is a misconceived comparison, in view of the fact that in those schemes also, either the fee, or the calculation method, is given and in this scheme also it was only the method given not the fixed fee.
He submitted the above, after drawing our attention to some nothings in the file, wherein it has been mentioned that:-
"...the formula for calculation of conversion fee has been in-built in the scheme and the conversion fee is not required to be notified time and again. However, as and when a fresh auction takes place, the EO is required to convey the new conversion fee calculated in accordance with the provisions of the scheme. EO may be advised to promptly convey the new conversion fee as and when a fresh auction takes place in future in accordance with Clause 6(ii) of the Scheme".
After the above noting, it has been mentioned in the file that the Estate Officer had earlier calculated the conversion fee as Rs. 41,556/- per sq. yd. and thereafter as Rs. 35,730/- per sq. yd., based on the auctions of 2003, 2004 and 2007. The suggestion also was that since the last three auctions years were to be taken into account and there was no auction held in the years 2005 and 2006, the conversion fee would work out to be Rs. 72,645/- per sq. yd.
59. Mr. Kaushal reiterated that it was thereafter that the decision was taken that it would be the last three auction years which would be taken into account, resulting in the increased fee working out to be Rs. 35,730/- per sq. yd. instead of Rs. 72,645/- per sq. yd.
60. Mr. Kaushal also drew our attention to a noting, wherein the Finance Secretary noted as under:-
"....It seems that failure to take timely action on the part of the concerned authorities are being attempted to be somehow swept under the carpet by way of insistence on issuing of notification. The conversion Scheme of 2005 is duly notified and as such, clause 6(ii) of the Scheme is also duly notified. Anything, which is once notified, is not to be notified again. The right course of action was that immediately after the auction of December, 2007 the E.O. should have communicated the revised rates in accordance with the Scheme to Chandigarh Housing Board. This was also discussed with E.O. and I have told him to do so also in past. However, instead of that a reference has been made to the Finance Department."
61. He submitted that the phrase "open ended" was used in some part of the noting file at the time when no auction was held.
He, thus, contended that the moment the mistake made by the nodal agency came into the notice of the higher level authorities, remedial action was taken immediately and though, no doubt, there was a noting in the file giving comments of various authorities, indicating that, in their minds there was some confusion that the Scheme may have initially envisaged a fixed price which needed to be revised after the auction of 2007; however, his vehement contention was that these nothings came about only as a result of such confusion in the minds of various individuals who, either had got transferred in after the scheme came into being, or simply by flux of time and pre-occupancy with various multifarious issues dealt with by the Administration on a daily basis, had forgotten the intention behind the original decision. He further contended that such nothings need not be given as much importance as the language and terminology used in the notification it self, read with the intention as available from the decision taken immediately before the scheme was notified.
He thus, reiterated his basic contention that since Annexure "C" of the notification gives the average price showing therein the price fetched in auction held from 2002 to 2004, which was the last auction before the notification of the scheme, the implication was obvious that upon another/other auction(s) taking place, the price fetched therefrom would also have been factored in while calculating the fee. Thus, even the definition of conversion fee as given in Clause 4(ii) to the effect that "conversion fee means the fee fixed by the Chandigarh Administration in the scheme" (emphasis supplied) would mean the fee fixed after application of the methodology given in Annexure "C". Thus, the word "fixed" does not mean that it would be the figure fixed in Annexure ''C'', but the figure arrived at after fixing the fee by the methodology provided therein.
62. He still further submitted that since at the time when the scheme was promulgated it was only for a period of two years and was not open ended, it was subsequently at the time of extension, it was mentioned in the noting that the scheme should not be made open ended, as it would lead to fixation of a particular fee. However, that was clarified by the noting mentioned (in para. 59 hereinabove), to the effect that the methodology for calculation was very clearly given in the scheme itself and as such, the fixation of the price on a particular fee could not be resorted to.
63. As regards the issue of retrospectively, Mr. Sanjiv Ghai, learned counsel appearing for the Administration in one of the matters, along with Mr. Kaushal, further submitted that the impugned order dated 14.07.2008 was not an order giving retrospective effect to a new fee but was simply an order which had to be issued in view of the confusion raised, such confusion possibly having been created at the behest of vested interests, and it simply gave the re-calculated fee by giving final clarification to the confusion and, as such, there was no question of application of the same retrospectively. Correctly speaking, the calculation should have been made in terms of the original notification itself, once a fresh auction took place on 17.12.2007.
Thus, it was submitted by both Mr. Kaushal and Mr. Ghai, that the impugned order was only a clarificatory one and was not a fresh direction which needed to be notified, or it could be taken to be an order which had been issued subsequently and given retrospective effect too. Therefore, the judgments referred to by counsel for the respondents, were not applicable.
64. As regards Mr. Balis'' contention with regard to the fee being a compensatory one, for which quid pro quo, learned counsel have submitted that it was not at all a compensatory fee but simply a charge on the land for change of usage thereof. As such, no quid pro quo needed to be shown, with regard to the manner of expenditure of the levy collected.
Both learned counsel submitted that even though the Chandigarh Administration had decided to maintain a separate fund in respect of all the fee collected and to spend the same on various infrastructure development/maintenance projects, however, the same was not because the levy was being treated as a compensatory fee but only because it was decided that it would be utilized in that particular manner.
However, the creation of a separate fund itself was shot down by the Union Govt., on the ground that Chandigarh, being a Union Territory, would send all revenue earned to the Consolidated Fund of India and, thereafter, budgetary allocation of funds would be made on an annual basis by the Govt., of India, as per demand raised and approved.
65. The arguments of all learned counsel, thus, concluded as above.
66. Having heard all learned counsel in detail in the matter and having considered it at length, we come to a conclusion that the appeals of the Administration deserve to be allowed and that filed by one of the writ petitioners, i.e. L.P.A. No. 112.5 of 2012 (M/s. Chandigarh Spun Pipe Co.), must fail.
We say so for the reasons that we shall give while discussing the arguments raised by various counsel.
67. Firstly, we are in agreement with Mr. Kaushal on the basic issue, that despite the fact that Clause 4(ii) of the Notification dated 19.09.2005, by which the scheme was originally promulgated, stipulates that the conversion fee means the fee fixed by the Administration in the scheme, the fixation is not with regard to the fee but with regard to the methodology thereof.
68. We say this upon seeing the methodology given in Clause 6(ii) of the above said notification, to the effect that "the conversion fee to be paid by the applicant who applies for conversion will be 50% of the average price of the commercial sites fetched in the auctions held in the last 3 years".
Thereafter, the said clause ends with "See Annexure "C" (statement showing calculation of conversion fee)". Annexure "C", as already noticed many a time hereinabove, having given the detailed history of all the auctions held from 2002 till 11.12.2004, fixes the average price, taking into account all the auctions held prior to the date of promulgation of the Notification in September 2005. Thereafter, the fee was fixed on the basis of such average price after giving the discounts mentioned in Clause 6(ii).
In our opinion, the phrase, "in the last three years," in Clause 6(ii), cannot be restricted to mean the years 2002, 2003 and 2004, in perpetuity. Obviously, they would be relatable to the time when a person applied for conversion of land usage. If we are to accept the respondents'' contention in this regard, it would mean that no matter how many auctions were held after 11.12.2004, they could never be taken into account to determine the average price obtaining at a given point of time.
We must not lose sight of the fact that the conversion of usage of land and the fee charge thereupon is, as is obvious from the formula given in the notification, based upon the difference in price between an industrial plot and a commercial plot, after factoring in various other conditions, such as location of the land etc. If we are to hold that the conversion charge is to remain confined to the price determined as per auctions held until 2004 only, we are, obviously, defeating the purpose of the charge itself. As such, by the very nature of the charge, in our opinion, it cannot be a fixed charge and has to be dependent on market forces as they change from time to time. Obviously, if the auction price drops below the level of any previous one, that too would, naturally, be determinative of the conversion charge to be fixed at that point of time. In the present case, of course, the price fetched in the 2007 auction was much higher than that fetched in 2004 and as such, the respondents are aggrieved of it. Whereas this would be a common reaction going by human nature, as any person is reluctant to shell out a higher amount of money from his pocket, we obviously cannot, by agreeing with the respondents'' contention, limit market forces, which remain fluid and are determined as per the business environment prevailing at any given point of time.
69. To our mind, therefore, there was no question of the fee remaining static once fresh auction(s) took place and, as such, the moment fresh auction(s) took place, the fee would necessarily have to be revised. This was also actually what was held by the learned Single Judge, with which we are in agreement; however, to our mind, his Lordship erred in holding that whereas the fee would necessarily change on the basis of each successive auction, it would remain constant during the subsistence of a particular notification fixing the validity of the period of the scheme. According to the impugned judgment, the date of notification of the original scheme and each successive extension would be the cut off date, for the purpose of calculation of the conversion fee and not the date of an application. In other words, if an auction had taken place before a particular notification, then the fee would remain static during the validity of the period for which the scheme was to remain in operation by that notification and any auction held within the period of that scheme, after the notification, cannot be taken into account.
With respect, we are unable to agree to this reasoning given by the learned Single Judge. Once it had been principally held by him also, that the fee was never envisaged as a constant figure but was to change depending upon the price fixed in each successive auction held in Chandigarh, for a commercial site, to our mind, there is nothing which remotely suggests that such an auction can only be the one which has been held prior to the date of each notification.
This reasoning is further fortified by a perusal of the compendium of file nothings in which the proposed conditions for conversion of land user were given on 25.05.2005, which reads as under:
"ii) The conversion charges to be paid by the applicant are fixed at the rate of 50% of the average price per square yard for all the auctions held by the Estate Office for commercial sites during the last three years calculated from the date of submission of application, (emphasis supplied by us) provided the FAR allowed shall be at par with the ones allowed in the case of commercial sites allotted during the referred auctions by the Estate Office. In case, the FAR differs from the earlier, as specified in the site sold by the Estate Office in its auctions, the rates shall be in relation to the ratio of FAR."
Obviously, the said file noting was not brought to the notice of the learned Single Judge. In any case, even de hors the above noting, we have already given the reasoning for holding as to why we are in agreement with the appellants'' contention.
70. Once it is thus accepted that Clause 6(ii) and Annexure "C" laid down a formula for calculation of the conversion fee, then necessarily the calculation itself would have to be held within the parameters of that notified formula, dependent upon the contingency of the number of auctions held at the time when any person applied for conversion of usage of his plot from industrial to commercial purposes.
71. As a matter of fact, none of the other writ petitioners, other than M/s. Chandigarh Spun Pipe Co, which had filed C.W.P. No. 19118 of 2009, has challenged the judgment of the learned Single Judge and, as such, beyond the reasoning given above, we would otherwise not need to comment upon the various arguments raised with regard to the fee being liable to be changed. However, since L.P.A. No. 1125 of 2012 has been filed by the said appellant, we would deal with not just the arguments raised by Mr. Bali, appearing for that appellant, but also by Sarvshri Arun Palli, Chetan Mittal and Karanvir Singh Khehar, in this regard.
72. Coming first to the arguments raised by Mr. Arun Palli, Senior Advocate.
The first argument, of course, we have already discussed above and held against him.
73. The contention that just because condition 6(ii) stipulates that the average price of commercial sites fetched in the auctions held "in the last three years" would necessarily mean that it was only last three years given in Annexure ''C'' also does not hold water, in view of the same reasoning, viz. that three years would necessarily be those years in which auctions took place, immediately preceding the date on which a person applied for such conversion.
74. We are in agreement with Mr. Kaushal that, in fact, the impugned order of 14.07.2008, gives relief to an applicant as it clarified that three years would mean three years in which the auctions were actually held and not the immediately three preceding calendar years. Thus, since no auction was held in the years 2005-06 and, if only auction held in December 2007 was to be taken into account, then the average price would obviously be the price fetched in a single auction.
We agree with this reasoning given by Mr. Kaushal.
75. The next argument, that the figures in Annexure ''C'' were not illustrative or imaginative but real figures, obviously would not hold good, in view of the reasoning given by us, that the figures were based on the auctions held in the 3 years prior to the date of notification on 18.09.2005. Obviously, at that point they were real figures and not illustrative, but with fresh auctions taking place, the figures would necessarily change with the methodology for calculation remaining the same.
76. His next contention that the scheme was valid for only two years at the time when it was promulgated on 18.09.2005, and that was the reason why the fee was fixed at the average price given in Annexure ''C'', would appear to be a valid argument at first blush, but in our opinion, would not hold good once it is held by us that Annexure ''C'' simply gives the methodology for calculation of the average price and would consequently change every time an auction is held. This is further fortified by the noting dated 25.05.2005, reproduced hereinabove.
77. Mr. Pallis'' next contention, which was also reiterated, along with other submissions, by all other counsel, was that while extending the period of the Scheme vide notification dated 18.09.2007, it was stated in the said notification that the extension would be up to 18.03.2008 "on the same terms and conditions".
To our mind, this term, as a matter of fact, negates the argument of Mr. Palli, as the phrase "same terms and conditions" would mean that the terms and conditions would remain the same, including the methodology for calculation of the fee. As such, the said phrase cannot be construed to mean that it fixed the fee at the figure as was given in Annexure ''C''.
In our firm opinion, it only fixed all the terms and conditions given in the original notification, including the methodology for calculating the fee and did not fix the fee as shown in the said annexure.
78. The next contention of Mr. Palli was that since the respondents (writ petitioners before the learned Single Judge) were those who had applied within the first extended term of the Scheme, i.e. between 18.09.2007 and 18.03.2008, hence, they could not be affected by an order issued on 14.07.2008 which was well beyond the date of expiry of the extended validity of the Scheme.
This argument, no doubt, would appeal to reason if we were to hold that the impugned order actually laid down fresh conditions over and above those notified on 18.09.2005 and 18.09.2007. However, in our opinion, this order is only clarificatory, to set at rest the controversy which had arisen due to the query raised by the nodal agency, i.e. Chandigarh Housing Board, on as to whether, after the auction held on 17.12.2007, the fee to be charged was to remain the same or was to be re-calculated.
Mr. Palli and Mr. Mittals'' arguments, on drawing our attention to the noting in the official file was, initially, almost accepted by us, since the said noting was made by the Advisor to the Administrator, to the effect that extending the policy for a long term means "the risk of making it open ended" and creating a speculative delay, with the conversion fee remaining static. The argument of both counsel for the respondents was that, obviously even in the mind of the Advisor and the Administration, the reasoning for limiting the extended validity to 6 months, was that the fee should not remain constant over a long period of time.
No doubt, as already said, this is a very convincing argument in favour of the respondents, but still has to be rejected, in view of both, the earlier noting and the subsequent nothings, to the effect that the formula for calculating of conversion fee was in built in the Scheme and as such the fee was not required to be notified time and again; as also for the reason given by Mr. Kaushal, that the bogey of doubt was raised on two counts, i) due to possible collusion at some lower level in the nodal agency, so as to try and ensure that a controversy is created on this issue and a fresh decision is taken in favour of the respondents and, secondly, by simple logistics of changing personnel in a Government hierarchy, who may possibly have lost sight of the reasoning in-built in the methodology for calculation of the fee, which was finally recognized by the noting of the Finance Secretary, to the effect that such methodology was already in-built in the Scheme.
To our mind, in fact, either or both of these factors could have been reasons on account of which the controversy arose in the first place, in view of the basic reasoning that we have already given, that the nature of the charge cannot allow the fee to remain static. As such, the noting of the Advisor cannot be taken in isolation and, in any case, not in contravention to what has been given in the original notification.
The confusion, in our opinion, arose after 2-1/2 years of the original notification having been promulgated, owing to the fact that during the validity of the operation of the original notification, i.e. between 19.09.2005 to 18.09.2007, no auction came to be held for sale of commercial sites in Chandigarh. Had such an auction taken place, within that two year period, the fee would have obviously changed within that time span and thereafter no confusion would have arisen, even upon a notification for extension of the validity of the Scheme being promulgated. Obviously, in the notifications extending the period of validity, the use of the phrase "the same terms and conditions" also created a doubt which may possibly have been exploited by vested interests. Whether or not such collusion actually did take place at any level, is something we are not going into, as, even bona fide, to our mind, such a confusion could have arisen, owing to the fact that during the initial two year period, the fee remained constant on account of no auction having taken place in that time.
In view of the above, we reject the above argument of the respondents.
79. Coming next to the argument that there was a conscious decision to keep the fee static, in view of the fact that the original notification dated 11.07.2005, which was not given effect to, gave a different methodology of calculation to the one eventually adopted vide notification dated 19.09.2005, that also, does not further the case of the respondents, in our view.
A perusal of the record shows that the amendment in Clause 6(ii) of the notification dated 11.07.2005 (which was not published) and of that dated 19.09.2005, was for the reason that "certain unit owners had met the officers and explained that para. 6(ii) of the Scheme is not very clear".
Their request was therefore examined and para. 6(ii) was accordingly amended, to bring "greater clarity" to the Scheme and to bring it in-conformity with Annexure ''C'' of the Scheme, (quotes taken from page 56 of the first compendium of the noting files).
Hence, this argument also fails.
80. At this stage, we would again stress upon the noting dated 25.05.2005, given on the first noting file of the years 2004-05 wherein, at page 37, the conditions for conversion of land used were proposed on 25.05.2005 and with regard to conversion fee, the date of application was proposed to be taken as the date prior to which three auctions were to be taken into account for calculation of the average price fetched therein, for a commercial site.
This would put paid to the argument of counsel for the respondents that the concept of the fee being calculated from the date of application was only introduced for the first time vide order dated 14.07.2008. Obviously, the intention expressed in the noting file in May 2005, though not expressly added in the notification, as it should have been for greater clarity, was incorporated into the methodology of calculation, as already discussed by us time and again in this judgment.
Of course, an argument was raised that the express provision not having been added in the notification of 19.09.2005, the intention of the Administration was to fix the fee, in view of the limited validity of the period of the Scheme.
In our view, this argument would also not negate the reasoning already given by us in the light of the nature of charge and subsequent file nothings.
81. Next, coming to the argument of Mr. Chetan Mittal that the reduction of floor area ratio (FAR) after conversion of an industrial plot to a commercial plot in the industrial area, as compared to a commercial plot falling within commercial area, was offset by keeping the fee static; we see no basis for this argument, inasmuch as, the FAR of the converted sites in the industrial area was 2.0 as compared to 4.0 in the commercial area and as such, the average price arrived at, was to be discounted to the extent of 50% in calculating the conversion fee and thereafter again discounted by 50%, in view of the locational disadvantage of the industrial area vis-�-vis commercial area. As such, fixation of the fee at a particular level would have no rationale, in view of the discounts already factored into the formula for calculation, especially as that formula, itself, was based on the average price fetched in the sale of commercial sites over a period of 3 years. In short, the lesser FAR was offset by a discount of 50% on the average price calculated, and not by the fixation of the fee at a fixed amount.
Thus, with every increase/decrease in auction price, an average price would also change, but the discounts of 50% for reduced FAR plus 50% for locational disadvantage, would remain constant and, thereafter the conversion fee in relation to the average price arrived at after each successive auction, would change accordingly.
We thus find no rationale in Mr. Mittals'' argument.
82. His next argument that the applications of six people had been accepted and conversion letters issued even after 17.12.2007 and no final decision up to March, 2008, could be shown, to show that a fee of more than Rs. 20,000/- per sq. yd. was to be charged, definitely needs proper consideration as, obviously, issuance of the letter allowing conversion, could vest a right in the applicant.
However, in view of the fact that these conversion letters were obviously issued in contravention of the method of calculation given in the notification dated 19.09.2005, would not, firstly, create a right in the person to whom the letter was issued, inasmuch as, an executive order contrary to the notification would not be sustainable.
We again refer, at this stage, to Mr. Kaushals'' contention that there was possible collusion at some level, and or bona fide confusion after 2� years; however, even though we refrain from making any comment on that averment, in the absence of any enquiry conducted by the Administration to that effect, we do give credence to the argument that the nodal agency, for good reasons or otherwise, did commit a mistake in not applying the formula of fee calculation as given in the notification and as was discussed prior to the notification having been issued in 2005 itself. Such confusion on account of change of personnel and/or flux of time is a very real possibility, which on any count, cannot alter the intention behind and the stipulation contained in the notification issued on 19.09.2005.
Therefore, a letter issued under a mistake of law against the provisions contained in a statutory notification, cannot be relied upon, to try and create a vested right in anybody. As such, the principle of promissory estoppel would not apply, as canvassed by Mr. Mittal, as there can be no estoppel against statute, taking the notification dated 19.09.2005 to be a statutory notification validly issued under Sections 7 and 22 of the Capital of Punjab (Development and Regulation) Act, 1952 and the rules made thereunder.
83. Thus, even his contention that a statute can only be read as per its plain meaning, though in principle obviously a sound argument, would not apply to the present case, in view of the fact that, as we have held, there was no ambiguity in the notification, which clearly gave the method of calculation of the conversion fee.
84. Mr. Mittals'' next contention, that even in terms of Section 22 of the Act of 1952, a fresh notification would have to be issued if the fee is changed, has obviously to be rejected, in view of the fact that we have held that the fee was never intended to be a static fee and the ''formula'' for its calculation was clearly given in the notification, a fresh notification would obviously be not required to be promulgated, every time a new auction was held.
85. His last contention, in addition to what was already argued by Mr. Palli, was that in all other Schemes/orders for conversion of land usage of one kind to the other, the fee is always fixed and is not ''dynamic'', also has to be rejected, in view of the fact that each Scheme would obviously be governed by the terms and conditions laid down in the same, as notified, and cannot be compared with the terms and conditions of any other unrelated Scheme. Moreover, a perusal of the record shows that much thinking went into the issue, prior to the notification and thereafter the formula for fee conversion was arrived at, as were the others terms and conditions to be satisfied, before permission for change of usage of the plots could be given.
This argument is also, therefore, rejected.
86. We now proceed to examine the contentions of Mr. Puneet Bali, Senior Advocate.
His main plank of challenge to the enhanced fee was that it is a compensatory fee and as such, a quid pro quo must be shown to have been achieved, by way of service rendered to the person paying the fee.
87. Before we deal with that argument, we would first refer to his rejection of the concept of "dynamic fee", as per the nomenclature given to the charge by Mr. Sanjay Kaushal.
We do not understand as to why a fee cannot be increased/decreased as per the criteria fixed for determining it by the concerned authority. Other than the change in fee on the basis of any inherently changing statistics within a criteria framed, a fee may also be per se changed, by a competent authority, for various reasons like the conditions of industry in general, long term plans with regard to inviting investments, changing industrial/business environment etc. As such, we find absolutely no basis in law and none has been brought to our notice by learned counsel, by which a competent authority can be restrained or bound down to keep a charge constant in perpetuity.
88. Now coming to his principal argument on the issue of the conversion fee being a compensatory fee. In our opinion, the argument itself is misconceived. We have already discussed the nature of the charge, which is based upon the difference in rates of industrial and commercial plots. We further elaborate that charges imposed for change of usage of land in any city or state that is regulated by the restrictions imposed by laws promulgated to ensure planned development, are not charges which are levied on the basis of any services to be rendered, or as incidental charges necessary to be imposed for expenses incurred in the process of promulgating and executing a particular Scheme. As such, they are neither compensatory, nor regulatory charges. A charge for grant of permission to change the usage of land is based on the differential between the price prevalent in the area where the land is located, which is consequently dependent upon the nature of general usage of land in that area. For that reason, industrial plots were allotted at different times to the respondents herein, in the Industrial Area of Chandigarh, for the purpose of setting up an industry. By virtue of sheer location and usage for industrial purposes, the value of the land allotted was far less than the value of land in other parts of the city, located in areas in which commercial activities, other than industrial activities, were allowed to take place.
In other words, a plot in the Industrial Area, on which only a manufacturing/allied industry could be set up, would usually fetch far less price than a plot located in a commercial area, on which a building can be erected for commercial purposes, usually far closer to residential areas.
As such, the charge for change of land usage from industrial to commercial purposes, is based upon the price that a commercial plot would fetch. Thus, the conversion charge of fee, based upon difference in price of land between an industrial plot, and a commercial plot, is not a fee to be charged for any service rendered, or for the purpose of deducting administrative expenses to which the authority may have been put.
Therefore, the conversion fee, even though termed as a fee by nomenclature, is not actually a fee, but a substantive charge, or more appropriately, a substantive price, for the land which was erstwhile being used by the owners thereof, for industrial purposes, which is the purpose for which it had been allotted to them and for which they had bought it, at the prices fixed at the time of purchase from the Administration. What is now to be charged from them is the differential between the price of land used for industrial purposes and the price of land to be used for commercial purposes. Thus, simply because the conversion charge is by nomenclature called a fee, does not bring it within the ambit of being classified either as a regulatory fee or a compensatory fee. If at all it is to be deemed to be a compensatory fee, even by stretching Mr. Balis'' argument, then quid pro quo is in the form of the usage, that is now being allowed, vis-�-vis the usage that it could have been put to earlier.
Nothing to the contrary has come to our notice either by way of any argument made by the counsel, or otherwise, with regard to the nature of the charge, as we have held to be hereinabove.
However, factually, it is a substantive charge in lieu of the price of a commercial plot and, to our mind, the increase in such charge or in such price, would be commensurate with the increase in price fetched in an auction of a commercial plot in the city, and accordingly, is a reasonable increase and, for that reason, the respondents cannot have any grievance against the same.
In the present case, to repeat, the locational disadvantage of the land falling in an industrial area has been duly discounted, as also has the issue of a lesser FAR available in the industrial area in comparison to a commercial area.
In view of the above, we do not see how the judgments relied upon by Mr. Bali in Jindal Stainless Limited, M/s. Indian Oil Corporation, A.P. Paper Mills Limited and State of U.P. v. Vam Organics Limited and Ors. (supra), would be applicable to a fee levied as a charge for change of land usage.
Hence, Mr. Balis'' contention in this regard is rejected.
89. As regards the challenge to the method of fixing the conversion fee, against which only the appellant in L.P.A. No. 1125 of 2012 filed a writ petition, for the reasoning given hereinabove, we find no ground to hold that the methodology arrived at is incorrect as it is based upon the rationale given above, vis-�-vis the difference between the prices of industrial and commercial sites.
90. Coming to his next contention, that had any decision been taken with regard to the fee being related to the date of application, then the same would have been specifically spelt out in the notification, in the same manner that the other change in the criteria was spelt out after the change of the wordings in Clause 6(ii) of the scheme, wherein, initially, the fee was based on the FAR and later that criteria was changed; in view of what we have already discussed while disagreeing with Mr. Chetan Mittal and Mr. Pallis'' on similar arguments made by them, we do not find any force in this contention either.
91. With regard to his contention, to the effect that a contract cannot be uncertain or vague as per Section 29 of the Indian Contract Act, 1872; in our opinion a valid contract, if any, would take place only after the application made by a person was accepted by the Chandigarh Administration, in terms of the notification, i.e. in terms of the subordinate legislation which made possible an offer for such a contract. The notification, by itself, is not a contract but manifestation of an executive decision laying down the parameters of an offer to be made by the Administration, with regard to allowing change of usage of property. Hence, the question of any concept of a fixed fee being read into the notification promulgating the scheme, on account of the provisions of Section 29 of the Indian Contract Act, would not arise in the present cases.
In this regard, we would again refer to Mr. Mittals'' contention that in such cases where the order granting change of land use had already been issued, a vested right accrued to the person in whose favour the order or letter was issued. We have already rejected that contention; however, in terms of the Contract Act, would a binding contract come into operation once the terms and conditions thereof were accepted on both sides? We think not, in the circumstances of the present case. As we have already said, the scheme having been notified by way of subordinate legislation issued under the provisions of Section 7 & 22 of the Capital of Punjab (Development and Regulations) Act 1952, being a statutory scheme, any order or action taken contrary to the Notification, would amount to a nullity, to the extent of repugnancy with the statute/notification. Hence, even in such cases, a contract against the statute, would obviously be void, in terms of Section 23 of the Indian Contract Act.
92. Mr. Balis'' next contention, based on 2 judgments cited by him, is the same as made by other learned counsel, on the effect of retrospective application of a declaration of a revised fee, vide the impugned order dated 14.07.2008. We have already held that there was no retrospective declaration of fee but only a clarification issue in that regard, vide the order dated 14.07.2008 of what was already inherently contained in the scheme itself, which clarification had to be issued in view of the confusion which got created both, in the minds of the public, as also within the Administration and Nodal agency itself. Hence, that contention already stands rejected.
93. These then, were all the arguments raised by learned counsel. After having dealt with all of them as detailed above, we allow all the appeals filed by the Chandigarh Administration and dismiss L.P.A. No. 1125 of 2012, with no order as to costs.
C.W.P. No. 4137 of 2011
94. Along with the appeals of the Chandigarh Administration, and L.P.A. No. 1125 of 2012, C.W.P. No. 4137 of 2011, a writ petition has also been filed by one Puranjit Singh, substantially seeking the same relief as was sought by the respondents in the appeals filed by the Administration, but also seeking another basic relief.
95. In this writ petition, the petitioner is praying that his application, for converting the usage of his plot from industrial to commercial purposes, be also considered, as, vide order dated 14.2.2011, it had been conveyed to him that the Chandigarh Administration had ''closed'' the conversion policy on 18.09.2008.
96. The petitioners'' grievance is that he had been asking for clarification of the conversion rate, because, as per the application form purchased by him in January, 2008, it was given as Rs. 20,000/-. However, news items gave it as a higher figure. As such he had sought clarification, and since the same was never clarified to him, he could not apply for the conversion. It is further contended that he had also applied for a "No Dues Certificate", to the Estate Officer Chandigarh Administration on 14.03.2008, as he had paid the due lease rent upto the year 2007-08. Such certificate was required by him for the purpose of applying for conversion of the usage of the plot. The "No Dues Certificate" was also duly issued on 18.03.2008, as was a "No Objection Certificate" from the ICICI Bank, with whom the property was mortgaged.
97. It has been vehemently contended by Mr. Karanvir Khehar, learned counsel appearing for the petitioner, that the petitioner had duly bought the application form in January 2008 but due to the confusion in the rates to be applied, for conversion of usage, he could not submit the form and had been diligently following up with the Administration, both by written letters, as also by personal visits, to the office of the Chandigarh Housing Board as also to the Estate Officer, Chandigarh Administration, in order to determine the fee which was to be paid along with the application form, but with little success.
98. Mr. Khehars'' contention, therefore, is that the petitioner could not be penalized for confusion in the minds of the Administration, due to which he could not apply in time. As such, he has prayed that the petitioners'' case for change of land use/conversion be considered on the basis of his letter dated 20.3.2008, addressed to various functionaries of the Chandigarh Housing Board, including its Chairman. A copy of the letter is annexed as Annexure P-6 with the petition. A perusal thereof shows that the petitioner had stated therein, that in view of the confusing news items which have come in various newspapers, it was not understandable as to whether the conversion rates were to be taken as Rs. 20,000/- per square yard or whether they have been revised from December 2007 on the basis of the principle of average price of the last 3 auctions enunciated in the conversion policy.
The letter further states that it was not understood as to how new rates could be made effective without a proper notification in that regard. As such, a clarification had been sought in the letter as to the precise conversion rate, as in the absence thereof, the petitioner was unable to submit his application along with the demand draft of Rs. 40,00,000/- as required (calculated @ Rs. 20,000/- per square yard).
99. This letter was replied to by the Accounts Officer of the Chandigarh Housing Board, on 23.04.2008 simply stating therein that the "work of industrial conversion" for which the Board was earlier the nodal agency, had now been assigned to the Estate Office U.T. Chandigarh and, as such, his application had been forwarded to the Estate Officer with whom the petitioner was asked to establish contact.
Mr. Khehar states that the Estate Officer had also been written to by the petitioner on 25.10.2011, in reply to which the impugned letter dated 14.09.2011 was issued to him.
100. He further drew our attention to a letter dated 20.03.2008, written from the office of the Chief Executive Officer of the respondent-Housing Board, to respondent No. 4, i.e. the Estate Officer, Chandigarh Administration.
This letter refers to an earlier letter dated 18.03.2008, addressed to the Finance Secretary, Chandigarh Administration, by the Estate Officer, intimating that the average price of the last 3 years auction was calculated to be Rs. 1,42,921/- after the auction dated 17.12.2007 and as such, the conversion charges were fixed at Rs. 35,730/- per square yard, in terms of Clause 6(ii) of the scheme.
The letter further states that the Housing Board had not received any notification regarding revision/enhancement of conversion charges though it had continued to receive applications till the last date of the extended period of the scheme; i.e. until 18.03.2008 (by virtue of the first extension) and conversion fee had also been accepted by the Board at the rate of Rs. 20,000/- per square yard and, on the basis of the same, conversion was allowed by the Single Window Committee at that rate, in respect of 3 plots.
Mr. Khehar, therefore, reiterated his contention that it is obvious that the respondents themselves were not clear about the conversion rates and as such, could not inform the petitioner in time, as to what charges he was to pay, calculated on the basis of any particular rate. As such the petitioner deserved sympathy of the Court and the application deserved to be accepted, for consideration in respect of the other conditions of the scheme.
101. In the reply filed by respondent No. 4-Housing Board, other than the factum of the learned Single Judges'' judgment having already come on the issue, it has been stated that no application under the scheme was ever received by the Board, from the petitioner, and that the matter has since been made over the successor nodal agency, i.e. the Estate Office, Chandigarh.
102. As per the reply of the Estate Officer, on behalf of the Administration and his office, it has been reiterated that the petitioner had never applied for conversion of land use during the subsistence of the scheme, as had been done by numerous applicants who even applied after 17.12.2007, annexing the fee calculated as per the original amount calculated, but who were subsequently asked to pay an amount calculated at the higher amount. It has further been averred that those who were aggrieved by the new rate of conversion had approached this Court, leading to the judgment of the learned Single Judge (impugned in the accompanying appeals) but the petitioner had chosen not to apply and as such he has no right whatsoever, to have his case considered at a stage when the scheme is no longer in existence.
103. In response to a query put by this Court, vide order dated 8.11.2012, as to whether the petitioner could be allowed to deposit 10% of the conversion fee at the rate of Rs. 20,000/- per square yard, along with interest and penal interest, the Assistant Estate Officer had filed an affidavit, effectively reiterating what was already stated in the earlier reply but adding therein that it was strange that the petitioner contacted the Estate Officer for the first time only on 3.2.2011, after a gap of almost 3 years of his seeking a clarification with regard to the applicable rates. As such, the petitioners'' prayer for allowing him to deposit the amount at that stage also, was declined by respondent No. 3.
104. The replication filed on behalf of the petitioner in effect reiterates what was stated in the writ petition but further states that the difficulty in submitting the form, without knowing the exact amount to be paid along with it, arose from the fact that if the conversion rate was taken to be Rs. 20,000/- per square yard, then a total amount of Rs. 4 crore would have to be deposited as conversion fee, whereas if it was taken to be Rs. 35,730/- then a sum of Rs. 7,14,60,000/- would have to be deposited and, as such, it was not possible for the petitioner to invest such a large amount with an uncertainty hanging on his head with regard to the rate of the conversion fee. Mr. Khehars'' contention, therefore, is that an ordinary plot owner, could not be expected to pay such an amount, in either case, with uncertainty hanging on his head.
105. Other than the above, Mr. Khehar''s also reiterated the arguments raised by counsel for the respondents in the appeals filed by the Administration, which we have already dealt with and rejected, while allowing appeals of the Chandigarh Administration. After hearing Mr. Khehar, as also Mr. San-jay Kaushal and Mr. Sanjeev Ghai for the Administration, we find ourselves unable to agree with the contention raised in the petition.
Obviously, the petitioner was fully aware that at least an amount of Rs. 20,000/- per square yard had to be paid in any case, for his application to be considered for conversion of his plot from industrial to commercial usage. Even if there was some confusion in his mind as to whether a higher rate of conversion had to be paid, that should not have stopped him from filing the application within the validity of the scheme, along with 10% of the total fee which was to be paid (even calculated as per the old rates). He, however, obviously chose to retain his money and thereafter, after about 2-1/2 years of the closure of the scheme, brought up the issue again, on the grounds given in the petition. We are afraid that at such a belated stage, i.e. in 2011, he had no right to have his case considered for conversion of usage, as the scheme had already been closed, after 2 extensions, on 18.09.2008. As such, we find no merit in the writ petition, which is consequently dismissed, with no order as to costs.
