Manmohan, J
1. The present Letters Patent Appeal has been filed challenging the judgment dated 7th September, 2007 by virtue of which learned Single Judge allowed respondent-owner''s writ petition being W.P.(C) No. 4886/2006 and quashed appellant-DDA''s demand of Rs. 36,23,538/- for the period from 1st April, 1990 to 6th May, 1999. It is pertinent to mention that the aforesaid demand had been raised by appellant-DDA on account of alleged permission fee for running a branch of respondent-SBI at respondent-owner''s premises. However, learned Single Judge gave liberty to appellant-DDA to proceed in accordance with law against respondent-SBI for recovery of the aforesaid demand. By way of the impugned order, learned Single Judge further directed appellant-DDA to pass necessary orders within four weeks with regard to respondent-owner''s application for conversion of premises in question from leasehold to freehold.
2. Briefly stated the material facts of the present case are that with regard to premises bearing No. E-27, Saket, New Delhi the respondent- owner and respondent-SBI executed three lease deeds dated 13th June, 1985, 16th January, 1992 and 8th February, 2001. By virtue of the aforesaid three deeds, respondent-SBI was liable to pay composition/permission fee as determined by appellant-DDA. In fact, for the period from 1985 to 31st March, 1990, appellant-DDA by virtue of power conferred under Proviso to Clause 13 of the Perpetual Lease Deed granted permission to respondent-SBI to run its branch in respondent-owner''s premises subject to payment of composition (permission) fee - which in fact was paid by respondent-SBI to appellant-DDA.
3. However, as subsequently respondent-SBI filed a petition challenging the rate at which permission fee had been levied, appellant- DDA in 1990 did not extend the permission to run SBI''s branch in the aforesaid premises.
4. In fact, appellant-DDA initiated prosecution against respondent- SBI in terms of Delhi Development Authority Act, 1957. The prosecution proceedings initiated by appellant-DDA against respondent-SBI were initially stayed by the Supreme Court and the same were ultimately quashed vide order dated 29th November, 2006 in Criminal Appeal No. 633/1996. The order dated 29th November, 2006 is reproduced hereinbelow for ready reference:
Criminal Appeal No. 633/1996
We are told that in this appeal, 19 premises are involved where the State Bank of India was operating its branches. Some of the branches have ceased to operate and some have been regularised. Learned Counsel for the State Bank of India states that only three branches which do not conform are operating and six months'' time may be granted so that, in the meantime, the said branches may either cease the operation and/or ensure that the user conforms to the norms of the DDA. The time, as prayed for, is granted. The appeal is disposed of in terms of the statement made by learned Counsel for the appellant and, in this view, the complaints filed against the bank are quashed.
5. In the meantime, in pursuance to appellant-DDA''s 1992 conversion policy, respondent-owner on 23rd December, 1999 applied for conversion of his premises from leasehold to freehold. But on 3rd March, 2006 appellant-DDA refused to convert the premises on the ground that permission fee amounting to Rs. 36,23,538/- for the period from 1st April, 1990 to 6th May, 1999 for running respondent-SBI branch in the premises in question had not been paid.
6. Ms. Sangeeta Chandra, learned Counsel for appellant-DDA submitted that by virtue of covenants of the perpetual lease deed as well as the conversion scheme, appellant-DDA was entitled to recover misuse charges from the respondent-owner. According to Ms. Chandra, learned Single Judge failed to appreciate that there was no privity of contract between the appellant-DDA and respondent-SBI. She further submitted that appellant-DDA was not bound by the terms and conditions of the lease deed which made the respondent-SBI liable for payment of misuse charges/permission fee. She further submitted that just because a criminal prosecution initiated against the respondent-SBI had been quashed by the Supreme Court, it did not mean that appellant- DDA could not recover past misuse charges from the respondent- owner.
7. On a perusal of the file, we find that though appellant-DDA was always aware of the alleged misuse of premises, it never raised any demand on this account against the respondent-owner. For alleged use of the premises in contravention of the Perpetual Lease Deed, appellant-DDA all throughout proceeded only against respondent-SBI. Appellant-DDA not only initiated criminal prosecution against respondent-SBI alone, but it also accepted payment of composition/permission fee for the period 1985 to 1990 as well as from 1999 to 2002 from respondent-SBI. In fact, we find that the demand for permission fee had never been raised against the respondent-owner.
8. In our opinion, appellant-DDA having decided to prosecute respondent-SBI for misuse of premises in question and having been a party to quashing of the said proceedings, cannot now insist that respondent-owner should first make the payment of misuse charges before appellant-DDA can grant conversion of the aforesaid premises. In fact, we find that appellant-DDA''s stance of recovery of misuse charges is an afterthought and has been taken for the first time in the present proceedings, as initially it was appellant-DDA''s case that the respondents were not entitled to any permission and for breach of the Perpetual Lease covenants, respondent-SBI was liable to be criminally prosecuted. Even in March, 2006 at the time of rejection of respondent- owner''s application, the appellant-DDA asked for payment of aforesaid amount on account of permission fee and not misuse charges.
9. We are also in agreement with learned Single Judge that if indeed the misuse had continued from 1st April, 1990 to 6th May, 1999 then why did DDA not raise such a demand prior to 3rd March, 2006 against the respondent-owner. Keeping in view the aforesaid, we are of the opinion that the stance adopted by appellant-DDA is inequitable in the facts and circumstances of this case.
10. Consequently, present appeal is dismissed but appellant-DDA is given liberty to recover, if so permissible in law, the demand of Rs. 36,23,538/- from respondent-SBI. However, Appellant-DDA is directed to pass necessary orders granting conversion of premises in question from leasehold to freehold and also to execute necessary conveyance deed in favour of respondent-owner within a period of four weeks from today.
