Delhi District Court
Gurpreet Singh vs Mcd on 7 January, 2025
Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
IN THE COURT OF PRINCIPAL DISTRICT & SESSION JUDGE
WEST DISTRICT, TIS HAZARI COURTS, DELHI
RCA DJ/11/2023
CNR No.: DLWT01-001681-2023
Gurpreet Singh
Prop. M/s Nirmal - The Furniture Store
83, furniture Block, Kirti Nagar,
New Delhi - 110015. .....Appellant
Versus
Municipal Corporation of Delhi
(A statutory body establish under the DMC Act)
Through its Commissioner
Dr. S. P. M. Civic Centre, Minto Road,
New Delhi-110002. .....Respondent
Date of institution : 22.02.2023
Date of conclusion of arguments : 07.12.2024
Date of judgement : 07.01.2025
JUDGEMENT
1. This is an appeal under Section 347(B) of the Delhi Municipal
Corporation 1957 (in short DMC Act) challenging a judgement dated
7.2.2023 passed by Appellate Tribunal MCD Delhi (in short ATMCD)
in Appeal No. 167/ATMCD/2022, upholding a sealing order dated
15.3.2022 bearing no. S/B/KBZ/Misuse/2022/25 issued by Deputy
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
Commissioner, Karol Bagh Zone under Section 345A read with
Section 347 of the DMC Act, 1957 in respect of premises/plot no.83,
Furniture Block, Kirti Nagar.
2. Notice of appeal was issued to respondent. Trial Court record of
ATMCD and MCD were summoned. Reply was filed and arguments
were heard.
Conditions of Allotment
3. As per the Perpetual Lease Deed dated 10th August 1978,
President of India had allotted Plot No. 83, Block-Furn, Kirti Nagar,
New Delhi for running the industry of wooden furniture to M/s Nirmal
Furniture Works. As per Clause 13 of the said lease deed, the
Lessee, without the written consent of Lessor, cannot use or permit to
use the aforesaid Plot or in any building thereon for residence or for
carrying on any trade or business, whatsoever, or use the same or
permit the same to be used for any purpose other than industry of
Wooden Furniture. I would like to reproduce Clause 13 of the
perpetual deed as under :
“(13) The Lessee shall not without the written consent
of the Lessor use, or permit to be used, the industrial
plot or in any building thereon for residence or for
carried on any trade or business whatsoever or use the
same, or permit the same to be used for any purpose
other than that of carrying on the manufacturing
process or running the industry of wooden furniture orRCA DJ/11/2023 CNR No.: DLWT01-001681-2023 Page 2 of 40
Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025such other manufacturing process or industry as may
approved from time to time by the Lt. Governor or do or
suffer to be done therein any act or thing whatsoever
which in the Lessor may be a nuisance, annoyance or
disturbance to the Lessor of and person living in the
neighbourhood.
PROVIDED that, if the Lessee is desirous of using
the said Industrial plot or the building therein for a
purpose other than that of the manufacturing
process or industry as may be approved from time to
time, the Lessor may allow such charge of user on
such terms and conditions, including payment of
additional premium and additional rent, as the
Lessor may in his absolute discretion determine.”
Show Cause Notice Dated 22.12.2021
4. Respondent i.e. the then North Delhi Municipal Corporation
(NrDMC) through Deputy Commissioner issued show cause notices
dated 22.01.2022 to the appellant U/s 345A and 347 of the DMC Act,
1957 on account of misuse/occupancy of the premises against the
sanctioned use/without paying the requisite charges as notified by the
Government etc. since non-compliance of the mandatory provisions
amount to violation of the provision of the Master Plan-2021.
Respondent vide the aforementioned notice directed the
appellant to stop the misuse and bring the premises within the
permitted use as per Master Plan-2021 within 48 hours and show
caused as to why the aforesaid premises be not sealed for misuse.
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
The above said show cause notice issued by the respondent
was replied by the appellant.
Sealing of the Premises
5. After considering the reply of appellant, the respondent through
its Deputy Commissioner sealed the premises of the appellant on
20.01.2022 vide order dated 20.01.2022 stopping the appellant from
carrying out furniture business.
W.P. (C) No. 1515/2022
6. Furniture Block Market Association filed writ petition titled as
“Furniture Block Market Association (Regd.) Vs North Delhi Municipal
Corporation (NrDMC) & Ors. bearing W.P. (C) No. 1515/2022 seeking
quashing of the show-cause notices and sealing orders in respect of
various properties in Kirti Nagar (including the present premises).
This Writ Petition was disposed vide Judgement dated 25.01.2022, in
which the Hon’ble High Court of Delhi directed the Respondent/MCD
to de-seal the premises and give fresh hearing.
Fresh Hearing
7. In compliance of the aforesaid order a fresh hearing was given
by Deputy Commissioner, North Delhi Municipal Corporation, Karol
Bagh Zone. Vide Order No. S/B/KBZ/Misuse/2022/25 dated
15.3.2022 the Deputy Commissioner passed this impugned order,
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
operative portion of the same is reproduced as under :
“And whereby, I have gone through the record and
documents placed before me. As per available record, the
owners/occupiers have been using the property for
commercial purposes for trading of furniture including
imported furniture, furnishing items which are in
contravention of their lease deed. As per its clause 4(a),
lease was granted for the purpose of manufacturing process
or running of any industry whatsoever.
And where, industrial units/plots can be put to
commercial use within the existing development control
norms subject to payment of conversion charges and all
other requisite charges (as applicable) computed as per
MPC-2021 & as per Govt. notifications.
Now therefore I, Shashanka Ala, Deputy
Commissioner/Karol Bagh Zone of North Delhi Municipal
Corporation in exercise of the powers vested in me under
Section 345 A read with Section 347 of the DMC Act and
rules made there under hereby intimate the
owner/occupiers of property bearing no. 88, Furniture Block,
Kirti Nagar, Delhi that their premises is already under
misuse as Commercial & directed to pay the conversion
charges = plot are (Sqmt) x Rs.21240.00 and parking
charges = Built up area (Sqmt) x Rs.1995.00 and all other
applicable charges as per MPD-2021 if applicable to North
DMC within 3 days of the receipt of this order. They should
take notice that any non-compliance of this order will
amount to violation of the terms of lease as well as
provisions of MPD-2021 & thus will automatically lead to
Sealing action against the continuing misuse of the
premises and no separate order/intimation will be sent in
this regard.
Issued under my hand seal on this __ day of March, 2002.
(SHASHANKA ALA)
Deputy Commissioner
Karol Bagh Zone”
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
8. Appellant received this order dated 15.3.2022 on 17.3.2022
whereby he was directed to pay conversion and parking charges
within three days of the receipt of the said order failing which the
premises would be sealed again.
Appeal before Appellant Tribunal of Municipal Corporation of
Delhi (in short ATMCD)
9. Aggrieved by the said dated 15.3.2022, the appellant filed an Appeal
No. 167/ATMCD/2022 titled as Anjali Bhasin Vs. North Delhi MCD.
After hearing arguments ATMCD dismissed the said appeal vide
impugned judgement dated 7.2.2022.
Jurisdiction of Principal District Judge to entertain appeal
against a judgement of ATMCD
10. Section 347D of the DMC Act provides for a remedy of an
appeal against the order of ATMCD to Administrator i.e. Lt. Governor
of NCT of Delhi. This provision was declared unconstitutional by the
Hon’ble Supreme Court of India in Civil Appeal No. 5075 of 2005 vide
judgment dated 21.04.2011 mandating appeal, if any, under Section
347D to be preferred to the District Judge till proper judicial authority
is setup under the DMC Act.
11. As no judicial authority to hear appeals against the judgements
of ATMCD has been set up till today, this court being the court of
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
Principal District Judge continues to be vested with the powers to hear
appeal against the orders/judgements of ATMCD.
Whether the MCD has power to seal the premises on the ground
of its misuse?
12. The appellant has challenged the impugned order submitting
that MCD has no power to seal any premises under Section 345 A of
DMC Act because this provision permits MCD to seal an unauthorized
construction and does not permit sealing of premises for misuser.
13. Ld. Counsel for appellant has taken me through the language of
Section 345A of DMC Act and has submitted that this provision of law
gives limited power to MCD to seal a premises only in case of
unauthorized construction. It is further submitted that the scope of
Section 345A was expanded by the Supreme Court of India in the
case of M. C. Mehta Vs. UOI : W. P. (C) No. 4677 of 1985 vide
judgment dated 16.02.2006 followed by judgment dated 29.09.2006.
However, Supreme Court of India had passed the said judgment only
in cases where residential premises were being used for commercial
purposes. Ld. Counsel for appellant has further drawn my attention to
a judgement dated 14.8.2020 passed in M. C. Mehta Vs. Union of
India and Ors., Writ Petition (Civil) No.4677 of 1985, where it is
observed as under :
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
“88. It is quite apparent that particularly when the
Monitoring Committee is not empowered to take action,
the incumbents could not have been deprived of the
due process of protection in accordance with law. As
against the action of the Monitoring Committee, no
appeal lies elsewhere. Even High Court is not
authorized to entertain any matter and scrutinize its
action, such is the drastic step taken by this Court by
way of an exceptional measure in public interest, and it
is confined to the misuse of residential property
for commercial purpose and encroachments and
unauthorized construction on the public land, roads.”
14. It is submitted that the aforesaid widening of scope of Section
345A would not extend to the misuse of industrial plot for commercial
purposes. Therefore, the aforesaid judgement of Supreme Court of
India is not applicable to the present case where the plot was allotted
for industrial purposes but being used for commercial activities.
15. On the other hand, Ld. Counsel for respondent/MCD has argued
that Supreme Court in the aforesaid judgement was concerned about
the “misuser” and not about the type of misuse.
16. First I would like to reproduce the relevant portion of Section
345A of The DMC Act as under :
“345A. Power of seal unauthorized constructions.
– (1) It shall be lawful for the Commissioner, at any
time, before or after making an order of demolition
under Section 343 or of the stoppage of the erection
of any building or execution of any work under
Section 343 or under Section 344, to make an orderRCA DJ/11/2023 CNR No.: DLWT01-001681-2023 Page 8 of 40
Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025directing the sealing of such erection or work or of the
premises in which such erection or work is being
carried on or has been completed in the manner
prescribed by rules, for the purpose of carrying out the
provisions of this Act, or for preventing any dispute as
to the nature and extent of such erection or work.
(2) ………
(3) ………”
17. Now I would like to refer to the relevant portion of M. C. Mehta
Vs. Union of India and Ors., Writ Petition (Civil) No.4677 of 1985 as
under :
“A bare perusal of building bye-laws shows how
relevant is the user, commercial or residential, and the
large impact of occupation load on various facilities
including water, sanitation and drainage.
Keeping future needs in view, experts prepare
Master Plans. Perusal of the Delhi Master Plan, 1962
and 2001 shows what were plan projections. At the
time of planning, the experts in the field of town
planning, take into account various aspects, such as,
healthy living, environment, lung space need, land use
intensity, areas where the residential houses to be built
and where the commercial buildings to be located,
need of household industries etc. Provision for
household industries in residential areas does not
mean converting residential houses in the commercial
shops. It only means permitting activities of household
industry in a part of a residential property. It does not
mean that residential properties can be used for
commercial and trading activities and sale and
purchase of goods. Master Plan contemplates shops in
District Centres, Community Centres, Local Shopping
Centres etc. and not in residential areas. Be that as itRCA DJ/11/2023 CNR No.: DLWT01-001681-2023 Page 9 of 40
Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025may, for the present, we are not considering the cases
of small shops opened in residential houses for
catering to day-to-day basic needs, but are considering
large-scale conversion, in flagrant violation of laws, of
residential premises for commercial use.
In respect of planning, reference can usefully be
made to Section 313 of the DMC Act as well. The said
section provides for the requirement of layout plan of
the land. It, inter alia, provides that before utilizing,
selling or otherwise dealing with any land under
Section 312, the owner thereof shall send to the
Commissioner a written application with a layout plan
of the land showing various particulars including the
purpose for which the building will be used. For breach
of Section 313, action can be taken under Section 314.
It has rightly not been disputed by any counsel that
neither layout plan, nor the building plan, can be
sanctioned by MCD except in the manner and for the
purpose provided in the Master Plan. If in the master
plan, the land use is residential, MCD cannot sanction
the plan for any purpose other than residential. In the
impugned judgment, while dealing with the provisions
of the layout plan, it was observed that the provisions
for user ‘are only regulatory in nature’. While dealing
with the user, the High Court observed that ‘the power,
whereby and whereunder the basic human rights or
the fundamental rights conferred upon a person is
taken away, must be specifically conferred by a
statute’. The provision of user may be regulatory but all
the same, they are mandatory and binding. In fact,
almost all the planning provisions are regulatory. The
violations of the regulatory provisions on massive scale
can result in plans becoming merely scraps of papers.
That is the ground reality in the capital of the country.
None has any right, human or fundamental, to violate
the law with immunity and claim any right to use a
building for a purpose other than authorised. Further,RCA DJ/11/2023 CNR No.: DLWT01-001681-2023 Page 10 of 40
Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025the words ‘unless the context otherwise requires’ in
Section 331 of the DMC Act are of no consequence for
determining the point in issue as the context herein
does not provide otherwise for the present purposes. It
does not provide that the power of sealing under
Section 345A cannot be exercised in case of misuser.
In view of the clear language of Section 345A, we are
also unable to sustain the view of the High Court that
action under Section 345A can be taken only when
there exists order of demolition under Section 343 or
an order under sub-section (1) of Section 344. The
conclusion of the High Court that action under Section
345A can be taken only when there exists an order of
demolition under Section 343, or on passing of an
order under sub-section (1) of Section 344, and in no
other contingency cannot be accepted in view of the
clear provision of Section 345A that action can be
taken even before or after an order is made under
those provisions. It is clear from a conjoint reading of
the definition of the expression ‘to erect a building’ in
Section 331 and Section 345A that conversion of user
would come within the purview of the expression ‘to
erect a building’. In this respect useful reference can
also be made to Building Bye-Laws for the Union
Territory of Delhi, 1983, in particular Bye-Law Nos.
2.17 and 2.85, defining the expressions ‘Conversion’
and ‘To Erect’ respectively, which read as under:
“2.17 Conversion\026 The change of an
occupancy to another occupancy or change in building
structure or part thereof resulting into change of space
or use requiring additional occupancy certificates.
2.85 To Erect\026 To erect a building means:
(a) To erect a new building on any site whether
previously built upon or not;
(b) To re-erect any building of which portions
above the plinth level have been pulled down, burnt or
destroyed; andRCA DJ/11/2023 CNR No.: DLWT01-001681-2023 Page 11 of 40
Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
(c) Conversion from one occupancy to another.”
Having regard to these definitions if a
Building/structure not originally constructed for use as
a shop, is put to use as a shop, such conversion of use
would come within the ambit of the expression ‘to re-
erect’ and, consequently, within the ambit of the
definition of the expression ‘to erect a building’. In view
of the aforesaid, reversing the impugned judgment of
the High Court, we hold that under Section 345A of
the DMC Act, the Commissioner of MCD is
empowered to exercise power of sealing in case of
misuser of any premises.”
18. I agree that Supreme Court of India was dealing with the
matters in which residential properties were being used for
commercial purposes. However, I disagree that Supreme Court
enlarged the scope of Section 345A only in respect of residential
premises being used for commercial purposes. The perusal of the
aforesaid judgement quoted above makes it clear that the Apex Court
dealt with the whole scheme of DMC Act regarding sealing power and
held that DMC Act empowers the Commissioner to seal a property in
case of misuser. Therefore, even though the present matter pertains
to conversion of industrial premises to commercial use, MCD has got
power to seal such premises under Section 345A of DMC Act.
Whether “misuse/conversion charges” amount to “tax”
19. It is argued by Ld. Counsel for appellant that no tax can be
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
imposed by MCD beyond Section 113 and 150 of DMC Act. Hence it
is submitted that DMC Act does not empower MCD to levy
misuse/conversion charges and therefore, the charges imposed by
the Deputy Commissioner MCD are not lawful.
20. Ld. Counsel for respondent has submitted that by the Office
Order No.55/Add.Com.Engg./2010 dated 7.6.2010, issued on the
decision of Lt. Governor, conversion charges have been imposed and
such conversion charges would not amount to “tax”. Therefore,
Section 113 and 150 of DMC Act are not applicable in the present
case.
21. Ld. Counsel for appellant has controverted this submission and
has cited TATA Iron & Steel Co. Ltd. & Anr. Vs. State of Bihar & Ors.
2017 Legal Eagle (SC) 1301 and Commissioner of Income Tax,
Udaypur, Rajasthan Vs. McDowell & Co. Ltd. 2009 Legal Eagle (SC)
883. Ld. Counsel for appellant argued that the “misuse/conversion
charges” are nothing but “tax” in terms of Article 265 of Constitution of
India.
22. I have considered the rival submissions and have perused the
aforesaid judgements cited by Ld. Counsel for appellant.
23. In TATA Iron & Steel Co. Ltd. (supra), Supreme Court of India
relied upon Commissioner of Income Tax, Udaypur, Rajashtan
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
(supra), which was approved by a nine Judge Constitution Bench of
Supreme Court of India in Jindal Stainless Ltd. & Anr. Vs. State of
Haryana & Ors., 2016 (II) Scale1.
24. In TATA Iron & Steel Co. Ltd. & Anr. Vs. State of Bihar & Ors.
2017 Legal Eagle (SC) 1301, it is held as under :
17. On behalf of the respondent-State, it is
submitted that the impugned demand is a ‘fee’ but not
a ‘tax’, the expression ‘tax’ occurring in Article 265
cannot take within its sweep – “fee”. Therefore, there
is no need for a legislative sanction for the impugned
demand.
18. The expressions “taxes” and “duties” are to be
found in many provisions of the Constitution. The
expression “fee” finds a place in Article 110(2)8 and
199(2), which are in pari materia. Both the Articles
recognise the existence of two kinds of fees. Fees for
licences and fees for services. Each one of the three
lists contained in the Seventh Schedule have entries
which employ the expression “fees” (Entry 96 of List I,
66 of List II and 47 of List III). Article 366 contains
definitions of various expressions employed in the
Constitution. Article 366(28) defines the expression
“taxation”- “(28) taxation includes the imposition of
any tax or impost, whether general or local or
special, and tax shall be construed accordingly;”
7.
See Articles 265, 266, 268, 269, 270, 271, Entries 82
to 91 of List I and Entries 46 to 63 of List II of the
Seventh Schedule to the Constitution.
19. The expressions “fee” and “duty” are not defined
under the Constitution. Article 366(28) employs
another expression “impost”. What are the legal
contours of each one of these expressions i.e. “tax”,
“impost”, “duty” and “fee” fell for the consideration ofRCA DJ/11/2023 CNR No.: DLWT01-001681-2023 Page 14 of 40
Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025this Court from time to time.
20. This Court in Commissioner of Income Tax,
Udaipur, Rajasthan v. McDowell And Company Limited,
(2009) 10 SCC 755 held:
“21. “Tax”, “duty”, “cess” or “fee” constituting a class
denotes to various kinds of imposts by State in its
sovereign power of taxation to raise revenue for the
State. Within the expression of each specie each
expression denotes different kind of impost
depending on the purpose for which they are levied.
This power can be exercised in any of its
manifestation only under any law authorizing
levy and collection of tax as envisaged under
Article 265 which uses only the expression that
no “tax” shall be levied and collected except
authorised by law. It in its elementary meaning
conveys that to support a tax legislative action is
essential, it cannot be levied and collected in the
absence of any legislative sanction by exercise of
executive power of State under Article 73 by the
Union or Article 162 by the State.
22. Under Article 366(28) “Taxation” has been
defined to include the imposition of any tax or impost
whether general or local or special and tax shall be
construed accordingly. “Impost” means compulsory
levy. The well-known and well-settled characteristic
of “tax” in its wider sense includes all imposts.
Imposts in the context have following characteristics:
(i) The power to tax is an incident of sovereignty.
(ii) “Law” in the context of Article 265 means an Act
of legislature and cannot comprise an executive
order or rule without express statutory authority.
(iii) The term “tax” under Article 265 read with Article
366(28) includes imposts of every kind viz. tax, duty,
cess or fees.
(iv) As an incident of sovereignty and in the nature of
compulsory exaction, a liability founded on principle
of contract cannot be a “tax” in its technical sense as
an impost, general, local or special.”
21. A nine-judge Constitution Bench of this Court in
Jindal Stainless Ltd. & Another v. State of Haryana &
Others, 2016 (11) Scale 1, quoted the above
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
mentioned statement of law with approval. Therefore, it
is now well settled that the expression “fee” is also
comprehended in the expression “tax” for the purpose
of Article 265 and even for the collection of a “fee”,
authority of law (i.e. legislative support) is mandatorily
required under the Constitution.
22. In view of the above mentioned authoritative
pronouncement, we need not examine the various
ancillary submissions made on behalf of the
respondent State relying upon various judgments 9 of
this Court rendered prior to judgment in Jindal
Stainless case (supra) that the expression “tax”
occurring in Article 265 does not take within its sweep
the expression “fee”.
25. The above quoted judgement leaves me in no doubt that the
“misuse/conversion charges imposed by the MCD in its impugned
order are nothing but “tax”.
Whether MCD has power to impose misuse/conversion charges.
26. Ld. Counsel for appellant has argued that specific power to
impose and recover tax/levy/fee/charges are governed specifically
under chapter VIII (Section 113 to 183) of the DMC Act and that it
does not empower MCD to impose misuse or conversion charges. It
is argued that conversion charges are covered under the definition of
“Tax” and no tax can be imposed by Government or any Authority
unless empowered by a statute. It is argued that the
“misuse/conversion charges are not mentioned in the list of taxes,
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
which MCD is empowered to levy under as per Section 113 of DMC
Act. It is submitted by Ld. Counsel for appellant that Section 113 of
DMC Act does not even remotely relate to misuse/conversion charges
claimed by MCD from the appellant. It is argued that as per Article
256 of the Constitution of India no tax/levy/fee or charge of any nature
whatsoever can be imposed without the authority of the law.
27. It is further argued by Ld. Counsel for appellant that the
conversion charges sought to be imposed and recovered by the
Corporation is in violation of Section 109(2) of DMC Act which
requires MCD to determine on or before 15 th February of each year
the rates at which various municipal taxes, rates and cesses shall be
levied in the next following year which cannot be subsequently be
altered for the year for which they have been fixed. No such exercise
appears to have been carried out by MCD.
28. Ld. Counsel for appellant has drawn my attention to Section 150
of The DMC Act, which empowers MCD to impose any other tax but
such tax can only be imposed in accordance with the procedure laid
down under Section 150. It is submitted that no resolution under
Section 150 has been passed by MCD for levying the conversion
charges. Therefore, it is argued that the conversion charges imposed
by respondent/MCD are illegal. Ld. Counsel for appellant has relied
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
upon Jindal Stainless Ltd. & Anr. Vs. State of Haryana & Ors.,
Civil Appeal No. 3453/2002, date of decision 11.11.2016l in which
Hon’ble Supreme Court of India held that no tax can be levied unless
power to impose and recover such tax has been accorded by a
Legislation. It is submitted that as misuse/conversion charges amount
to “tax”, MCD has no power to impose and recover the same without
following the procedure laid down under Section 150 of DMC Act. It is
submitted that simply by framing a policy vide an office order, no tax
can be levied or recovered.
29. Ld. Counsel for respondent/MCD has opposed the appellant on
this point submitting that the said charges are levied and demanded
by the answering respondent on the basis of various notifications
which has been issued by Ministry of Urban Development, being
notification bearing No. S.O.2034(E) dt. 12.08.2008 and notification
bearing no. 1215(E) dated 13.05.2013, wherein, as per Clause (vi) it
is provided as under :-
“[vi) Industrial units / plots abutting roads of 24m ROW
and above shall be eligible for conversion to
commercial use within the existing development control
norm, subject to payment of conversion charges
computed on current market value of commercial area
and cost of parking as decided by the Government
from time to time. The activities permissible in
Community Centre will be permitted in such plots. In
addition, multilevel parking shall be permissible activity.
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
However, this shall not be permitted on non-conforming
/ regularized industrial cluster. The above provision
shall not affect the Supreme Court orders in any way.]”
30. It is further submitted by Ld. Counsel for respondent/MCD that
based upon notification dt. 12.08.2008, an office order dt. 07.06.2010
was issued by the then Unified MCD being office order bearing no.
55/ADDL.COM.ENGG./2010, whereby, one time use conversion
charges, as well as annual conversion charges and parking charges
for different industrial areas were determined and fixed. It is further
submitted by Ld. Counsel for respondent/MCD that under the said
office order, the use conversion charges were levied upon the built-up
area under conversion.
31. It is further submitted by Ld. Counsel for respondent/MCD that
the said rates vide notification dt. 03.07.2018, being issued by the
Land Disposal Wing of Delhi Development Authority under the
heading “Fixation of charges for allowing permitted non-industrial
activities, such as residential use (Group Housing) etc. in existing
industrial areas, in accordance with provisions of notified under MPD-
2021 and also revision/fixation of charges of use conversion in case
of Industrial to Commercial/Hospital” has been revised and are now
being levied upon the plot area irrespective of the built up area under
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
conversion. It is further submitted by Ld. Counsel for
respondent/MCD that Sr. No.3 of the said notification, the new rates
have been fixed as Rs.21,240/- per sq. mt. of the plot area.
32. It is argued by Ld. Counsel for respondent/MCD that the
conversion rates have been charged as per said office order.
33. During the course of arguments, I had raised a query to MCD
vide order sheet dated 8.11.2024. The order sheet is reproduced as
under :
“One of the issues, which requires decision of
this court, is as to whether MCD is empowered to
impose conversion charges, which have been
promulgated through Office Order No.
55/Addl.Com.Engg./2010 dated 07.06.2010.
As the conversion charges do not find mention
in the list of taxes described in Section 113 of DMC
Act, the other taxes including conversion charges can
be imposed only through by following the procedure of
Section 150 of DMC Act.
The reply of MCD is silent on the issue as to
whether the Office Order No. 55/Addl.Com.Engg./2010
dated 07.06.2010 had been issued by MCD after
following the procedure of Section 150 of DMC Act.
MCD is directed to file specific answer to this question
along with relevant documents.
Put up the matter for this purpose and further
arguments on 16.11.2024.”
34. Pursuant to the aforesaid directions, MCD filed a status report,
which is reproduced as under :
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
“Status report on behalf of respondent, Municipal
Corporation of Delhi.
Respectfully Showeth:
(a) That the present status report is being filed in
compliance of the direction passed by the Hon’ble Court
vide order dated 08.11.2024 in the subject matter.
(b) That the Section 113 of the DMC Act 1957 is related to
levy of taxes and section 150 is related to imposition of
other charges. The imposition of Conversion charges
are not a type of tax levied by MCD. Hence Section 113
& 150 are not attracted and applicable in this case.
(c) That the imposition of conversion charges are governed
by Master Plan of Delhiwhere DEVELOPMENT CODE
clause 2(10) states that Conversion charges/ other
levies as prescribed by the Government from time to
time shall be payable wherever land use conversion
from time to time is enabled at premises level by Master
Plan/Zonal Plan, Mixed Use Regulation and other
Regulations.
(d) That the issue of conversion of Industrial Plot to
Commercial usage is governed by the notification no.
544(E) dated 25.02.2009 and amended vide no.
S.O.3233(E) dated 03.07.2018.
(e) That the conversion charges/parking charges/Addl. FAR
are levied and demanded by the answering
respondent/Corporation on the basis of various
notifications which have been issued by MOUD bearing
No. S.O.2034(E) dt. 12.08.2008 and notification bearing
no. 1215(E) dated 18.05.2013, whereby amendments
were made in the MPD-2021, by way of inserting Clause
(vi) under clause Industry use Zone – Guidelines which
provides as under :-
“[iv) Industrial units / plots abutting roads of
24m ROW and above shall be eligible for conversion to
commercial use within the existing development
control norm, subject to payment of conversion
charges computed on current market value ofRCA DJ/11/2023 CNR No.: DLWT01-001681-2023 Page 21 of 40
Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025commercial area and cost of parking as decided by the
Government from time to time. The activities
permissible the Government from time to time. The
activities permissible in community Centre will be
permitted in such plots. In addition, multilevel parking
shall be permissible activity. However, this shall not be
permitted on non-conforming/regularized industrial
cluster. The above provision shall not affect the
Supreme Court orders in any way.]”
(f) That the said rates vide notification bearing no.
S.O.3233(E) dt. 03.07.2018 issued by the Land Disposal
Wing of the Delhi Development Authority under the
heading “Fixation of charges for allowing permitted non-
industrial activities, such as residential use (Group
Housing) etc. in existing industrial areas, in accordance
with provisions of notified under MPD-2021 and also
revision/fixation of charges of use conversion in case of
Industrial to Commercial/Hospital” has been revised and
are now being levied upon the plot area irrespective of
the built up area under conversion of the Industrial
Units/Plots for commercial purposes.
Report is submitted accordingly.
R.K. Rohilla
ASSTT. ENGINEER (BLDG)
KAROL BAGH ZONE”
35. I have considered the rival submissions and have perused the
aforesaid notifications issued by Ministry of Urban Development and
office order issued by MCD. There is no need for reproducing the
notifications issued by Ministry of Urban Development. Its power to
issue aforesaid notifications amending Master Plan for Delhi 2021 and
levying misuse/conversion charges are not under challenge in this
appeal as the same cannot be challenged before this court being
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
second Appellate Authority under DMC Act and is not an Appellate
Authority under DDA Act. Therefore, I will come to the office order
issued by MCD. Vide this order, the rates of conversion charges have
been fixed.
36. Before coming to the said office order, I would like to reproduce
relevant portion of Section 113 of DMC Act as under :
113 Taxes to be imposed by 3[a Corporation] under
this Act. – (1) 3[A Corporation] shall, for the purposes
of this Act, levy the following taxes, namely:-
(a) property Tax;
(b) a tax on vehicles and animals;
(c) a theater-tax;
(d) a tax on advertisements other than
advertisements published in the newspaper;
(e) a duty on the transfer of property; and
4
[(f) a tax on buildings applications payable along
with the application for sanction of the building
plan.]
(2) In additional to the taxes specified in sub-
section (1), 3[a Corporation] may, for the
purposes of this Act, levy any of the following
taxes, namely:-
(a) an education cess;
(b) a local rate on land revenues;
(c) a tax on professions, trades callings and
employments.
(d) a tax on the consumption, 5[sale or supply] of
electricity;
(e) a betterment tax on the increase in urban land
values caused by the execution of any
development or improvement work;
(f) a tax on boats; and
(g) tolls.
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
(3) The taxes specified in sub-section (1) and sub
-section (2) shall be levied, assessed and
collected in accordance with the provisions of
this Act and the bye-laws made thereunder.”
37. The list of taxes mentioned from (b) to (f) in sub-section (1) and
(a) to (g) in sub-section (2) of Section 113 makes it obvious that same
do not include misuse/conversion charges. Now it is to be seen as to
whether “property taxes” appearing in Section 113(1)(a) can be
stretched to an extent to fit the aforesaid charges in. This inquiry lead
me to definition of “property tax” in Building Bye Laws (BBL) 2 (e) of
the Delhi Municipal Corporation (Property Taxes) Bye Laws 2004. I
reproduce it as under :
“2. Definitions. – (1) in these bye-laws –
(a) .......
(b) .......
(c) .......
(d) .......
(e) "tax' means property tax, that is to say, a
building tax or a vacant land tax or both."
38. The aforesaid definition and the entire BBL do not include
misuse/conversion charges in the definition of property tax.
Therefore, it is clear that conversion/misuse charges are not included
in the list of taxes enumerated in Section 113 of DMC Act. However,
statute provides a procedure to impose taxes, which have not beenRCA DJ/11/2023 CNR No.: DLWT01-001681-2023 Page 24 of 40
Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025listed in Section 113. This procedure has been provided under
Section 150 of DMC Act.
39. Therefore, it takes me to Section 150 of DMC Act, which is
reproduced as under :
150. Imposition of other taxes. – (1) [A
Corporation] may, at a meeting, pass a resolution for
the levy of any of the taxes specified in sub-section (2)
of section 113, defining the maximum rate of the tax to
be levied the class or classes of persons or the
description or description of articles and properties to
be taxed, the system of assessment to be adopted and
the exemptions, if any, to be granted.
(2) Any resolution passed under sub-section (1)
shall be submitted to the 2[***] Government for its
sanction, and if sanctioned by that Government, shall
come into force on and from such date as may be
specified in the order of sanction.
(3) After a resolution has come into force under
sub-section (2), 1[a Corporation] may, subject to the
maximum rate, pass a second resolution determining
the actual rates at which the tax shall be leviable; and
the tax shall come into force on the first day of the
quarter of the year next following the date on which
such second resolution is passed.
(4) After a tax has been levied in accordance with
forgoing provisions of this section, the provisions of
sub-section (2) of section 109, shall apply in relation to
such tax as they apply in relation to any tax imposed
under sub-section (1) of section 113.”
40. Section 150 of DMC Act thus provides a legislative procedure
through which MCD can impose taxes other than mentioned in
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
Section 113 of DMC Act.
41. With a view to find the source of power to levy conversion
charges, I would like to reproduce initial portion of this office order as
under :
“MUNICIPAL CORPORATION OF DELHI
OFFICE OF THE ADDITIONAL COMMISSIONER [ENGG.]
TOWN HALL : CHANDNI CHOWK : DELHINo. 55/Addl.Com.Engg./2019 Dated : 07.06.2010
OFFICE ORDER
CONVERSION CHARGES FROM INDUSTRIAL TO
COMMERCIAL/BANQUET HALLSIn supersession of office order No.D-16/Addl. Com.(Engg.)/10, dated 15/02/2010, the
following policy shall be adopted for realization of conversion charges from industrial to
commercial /. banquet hall.
……….
This issues as per decision of Hon’ble Lt. Governor.
Sd.
ADDITIONAL COMMISSIONER (ENGG)”
42. Crux of Section 150 of DMC Act is that corporation may pass a
resolution for levy of other taxes and such resolution has to be
submitted to the Government for its sanction. If such resolution is
sanctioned, the MCD shall pass a second resolution determining the
rates of such tax. As already stated I had specifically put a question
to MCD as to whether or not the legislative process as envisaged
under Section 150 of DMC Act was followed or not. Reply of MCD
shows that it was not followed. Rather MCD simply adopted as a
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
matter of policy the misuse and conversion rates notified by DDA
under various notifications.
43. It is clear that aforesaid office order was issued without any
authority or legal backing under MCD Act. Hence, it is held that the
aforesaid misuse/conversion charges imposed upon the appellant
vide impugned order of MCD is not lawful and MCD erred in levying
the said charges, which amount to tax as already discussed.
Whether the terms “industrial” and “commercial” can be used
interchangeably.
44. It is argued by Ld. Counsel for appellant that the industrial
activity is nothing but a commercial activity. Therefore, if a plot has
been allotted for industrial use, it means that the allottee can use it for
commercial purpose also. It is further submitted that the word
“industrial” and “commercial” have not defined under any Act or any
Rules. Therefore, it is submitted that considering these two terms as
separate categories of user is unjustified.
45. I have considered the submissions. When a term is not defined
in any law, its meaning in common parlance has to be accepted.
“Industry” involves mainly the manufacturing activity, though it may
involve commercial transactions necessary for running such industry.
However, “commercial” use does not involve manufacturing activity. ItRCA DJ/11/2023 CNR No.: DLWT01-001681-2023 Page 27 of 40
Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025is not the case of appellant that the furniture was being manufactured
at the premises. Further, I disagree with the submission that the word
“industrial” and “commercial” have not been defined in law. Section 9
(c) and (e) of The Delhi Municipal Corporation (Property Taxes) Bye-
Laws 2004 have defined various types of use of buildings including
“mercantile building” and “industrial building”. I would like to
reproduce the same as under :
9. Definitions of use-wise categories of buildings.
– For the purpose of clause (f) of sub-section (1) of
section 116 A, the use-wise –
(a) .............
(b) .............
(c) "mercantile building" shall mean any building or
part thereof used as shops, stores or markets for
display or sale of merchandise, either wholesale or
retail, or for office, storage or service facilities
incidental to the sale of merchandise and located in the
same building, and such buildings shall include
establishments wholly or partly engaged in wholesale
trade, manufacturer’s whole-sale outlets (including
related storage facilities), warehouses, and
establishments engaged in truck transport (including
truck transport booking agencies), and subscriber
trunk dialing and international subscriber dialing
booths;
(d) .............
(e) "industrial building" shall mean any building or
structure or part thereof in which products or materials
of all kinds and properties are fabricated assembled or
processed as in assembly plants, and such buildings
shall include laboratories, power plants, smoke
houses, refineries, gas plants, mills, diaries, factories,
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
workshops, automobile repair garages, and printing
presses, but the portion of the building for purposes
other than purposes specified in this clause shall be
assessed separately according to its use;
…….”
46. Needless to say that premises used for commercial purpose has
been defined as “mercantile building” in the aforesaid sections.
Aforesaid Bye-laws make it clear that the mercantile building is used
for storage, sale or display of merchandise, whereas an industrial
building is a building where products are being fabricated, assembled
and process. Thus the said bye-laws sufficiently define, describe and
differentiate the buildings used for commercial purposes and industrial
purposes.
47. There is nothing on record to show that the premises/building in
question is being used for industrial purposes and there is no material
to doubt the respondent’s case that the said premises is being used
for commercial purposes. Therefore, I find no infirmity in the
impugned judgement that the premises in question is being used
exclusively for commercial purposes, despite the fact that premises
was allotted for industrial purposes.
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
Whether MPD 2021 depict the premises in question as a
commercial zone?
48. Ld. Counsel for appellant has painstakingly taken me through
MPD 2021 and modifications in the same and on the basis of same it
is submitted by Ld. Counsel for appellant that quasi judicial authority
of MCD and ATMCD have failed to take notice of the MPD-2021 and
the zonal plan, which show that the area is to be used for commercial
purposes. It is submitted that Ld. ATMCD was unable to take note of
the relevant facts and did not notice that the area is commercial in
nature and therefore, even if the premises was allotted for industrial
purposes, the appellant was bound to use it for commercial purpose
in view of the modified Master Plan.
49. I am of the considered opinion that the aforesaid arguments are
of no benefit to the appellant. Admittedly the plot was allotted for
industrial purposes. Therefore, appellant can only run industrial
activities in his premises. Even If it is presumed that the Master Plan
has declared the area to be used for commercial purposes, still the
terms and conditions of allotment would not change. For bringing any
change in the use of the premises from industrial to commercial, the
appellant must get change of user as per rules. He cannot unilaterally
change the terms and conditions of the allotment.
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
Whether the terms of a lease deed are dynamic and the same
should be construed as per the demands of changing times.
50. Ld. Counsel for appellant has referred to Panacea Biotec Ltd.
Vs. Delhi Development Authority & Anr. 2008 Legal Eagle (DEL)
544 (Date of Decision 23.04.2008) and argued that when a lease is
for a very long time its clauses should be interpreted considering the
changes and developments that has taken place over a time. Ld.
Counsel for appellant has drawn my attention to para 19 of this
judgement, which is reproduced as under :
“19. The lease deed in question is a statutory
document prescribed under the Nazul Rules.
Nevertheless while interpreting its clauses, one has to
keep in mind that the lease is for a term of 99 years
and therefore the clauses have to be interpreted
considering changes and development that take place
over a period of time and construction of the words
used in the sub-lease Deed has to be alive and one
which takes into account relevant changes that take
place with new technology and need and requirement
of the society. The lease deed has to be read in a
dynamic manner and the expressions used have to be
understood by updating construction and meaning to
be assigned to the expressions used lest they become
totally outdated and ill-tuned with the ground reality.
The words have to be interpreted in accordance with
the current understanding and not in a theoretical
manner. If reality requires adjustment and liberal
interpretation of expressions used in the Sub-lease
Deed, they should be interpreted liberally. [On the
question of updating construction of words used in theRCA DJ/11/2023 CNR No.: DLWT01-001681-2023 Page 31 of 40
Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025statue, see observations of the Supreme Court in
Commissioner of Income Tax Vs. Podar Cement,
report in (1997) 5 SCC 482.]”
51. I have carefully perused this judgement cited by Ld. Counsel for
appellant. In this judgement, High Court of Delhi was considering a
case where the property was allotted by DDA under a perpetual lease
deed dated 17.4.1978 for carrying out manufacturing process or
running of industry. Para 9 of the said judgement reveals that
pursuant to a court order, a joint inspection was carried out on the
premises as per which basement was found to be used for storage,
ground floor was used for software programming and the first and
second floors were found to be used for office purposes. The
arguments of DDA before Hon’ble High Court of Delhi is culled as
under :
“13. During the course of hearing, it was submitted
by the learned Counsel for the DDA that software
development Information Technology enabled services
cannot be categorised as a ‘manufacturing process’ or
‘industry’.”
52. In para 17 of the said judgement, High Court of Delhi observed
that in Master Plan of Delhi 2021, computer hardware and software
industry have been regarded as an “Industrial Activity”. In para 17 of
the said judgement, High Court of Delhi noted that in Master Plan of
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
Delhi 2021, a limited type of new industries including the computer
hardware and software industries have been permitted being high-
tech area. In backdrop of these facts, it was observed in para 18 of
the judgement that with changing times the construction of words
used in Sub-lease Deed has to be interpreted dynamically. However,
in no manner, High Court of Delhi changed the terms of the lease
deed converting the user from one head to another. In said case the
premises was allotted for industrial purposes and High Court of Delhi
held that as per the Master Plan of Delhi 2021, the computer
hardware and software industry amounts to an industrial activity.
53. Therefore, it is clear that the judgement cited by Ld. Counsel for
appellant is not applicable to the facts of the present case, where the
industrial premises is being used for commercial purposes. It is
correct that when there is lease for a very long period, the
circumstance and nature of industrial or commercial activities change
with advancement of time and technology. Therefore, the terms of
such lease deed can be interpreted dynamically to allow new
industries, which were not foreseen at the time of writing the lease
deed, to be run on such premises. High Court of Delhi in the
aforesaid judgement simply held that computer hardware and
software industry is also industrial activity and that at the time of
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
writing the lease deed, such industry was not in existence and that
modern high-tech industry can be defined as the product, which may
be intangible initially, but when it is transferred to floppy, CD Roam,
Punch Card, Magnetic tapes etc. it becomes a marketable commodity
or goods. It was held that such product is saleable and has value
even in intangible form. Therefore, it was held that Sub-Clause 14 of
the sub-lease deed has to be interpreted in a reasonable manner and
with sufficient flexibility and should not be given a very strict
interpretation as to prevent the sub-lessee from using the property in
the manner he wants. It was further held that computer software is a
marketable product and are “goods” under Article-366(12) of The
Constitution of India. It was further held that use of intellectual rights
and resources, which are otherwise intangible, to produce a product
can be regarded as manufacturer production/activity for the purpose
of Sub-Clause 14 of the Sub-lease Deed. The ratio of this judgement
is that with advancement of new technologies, new industries may
come up and the terms of lease deed can be interpreted to include
such new industries within the “manufacturing clause” of the lease
deed. As already stated, Hon’ble High Court of Delhi did not change
the user of the premises, rather brought the high-tech industries within
the meaning of “manufacturing”. Ld. Counsel for appellant wants this
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
court to interpret industrial activity to include commercial activity also.
But it is not possible under law to convert the industrial activity to
commercial activity. If this is allowed, it will destroy the entire purpose
of town planning, which is being effected through Master Plan. I
would like to mention here that the Delhi Development (Master Plan
and Zonal Development Plan) Rules 1959 provide a complete
procedure for preparation of the Master Plan and Zonal Development
Plan and procedure for amendment in the same. Perusal of the same
would reveal that draft of Maste’r Plan is prepared taking in
consideration the survey and analysis of the socioeconomic
feature of Delhi with special reference to the trends of growth of
population, industries, business, commerce and such matters as
may relate to a planned development [Rule 4(3)]. Thereafter, it is
published and representation, objections and suggestions of persons,
authorities etc. to such draft are invited and are considered (See Rule
5 to 9). Only after hearing such objections etc., a report of
recommendation is prepared and final draft of Master Plan is sent to
Central Government (See Rule 10 and 11). When such elaborate
exercise for preparation and amendment of Master Plan and Zonal
Plan is provided, it would not be justified to interpret the industrial
activity to include commercial activity or any other activity as such
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
exercise would finish the whole purpose of Master Plan and Zonal
Plan.
54. Here I would like to refer to Section 14 of The Delhi
Development Act 1957, which is reproduced as under :
“14. User of land and buildings in contravention
of plans. – After the coming into operation of any of
the plans in a zone no person shall use or permit to be
used any land or building in that zone otherwise than in
conformity with such plan:
Provided that it shall be lawful to continue to use
upon such terms and conditions as may be prescribed
by regulation made in this behalf and land or building
for the purpose and to the extent for and to which it is
being used upon the date on which such plan comes
into force.”
55. The aforesaid section certainly bars change of any use of the
premises, if it violates Master Plan or Zonal Plan. Therefore, If the
contention of Ld. Counsel for appellant is accepted, it may lead to
disastrous results.
56. Coming to Clause 13 of the perpetual lease deed already
reproduced in earlier part of this judgement, its perusal leaves me in
no doubt that it does not permit the lessee to use the plot for any
purpose other than industrial. However, it leaves scope for change of
its user. It can be done by seeking permission of lessor subject to
payment of additional premium and additional rent as the lessor may
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
determine. Therefore, the appellant cannot be allowed to use the plot
in question for commercial purpose without seeking permission of the
lessor and such change of user cannot be brought about by liberally
interpreting the term “industrial” to include commercial activity.
Conclusion
57. The conclusion of the aforesaid discussions is summarized as
under :
(i) The premises in question was allotted for industrial purposes by
President of India through DDA vide a perpetual lease deed under
Government Grants Act 1895.
(ii) This premises is being used for commercial purposes in
contravention of the terms and conditions of the perpetual lease deed.
(iii) Therefore MCD is within its power under Section 345A read with
Section 347 of DMC Act to seal the premises in question on account
of its misuse.
(iv) However, Deputy Commissioner MCD cannot imposed misuse
charges/conversion charges (levied in the impugned order) as MCD
has no power to levy and recover the same (see discussion in para 28
to 45 of this judgement on Section113 and 150 of DMC Act).
58. Therefore, the impugned order of Deputy Commissioner MCD
regarding its power to seal the premises for misuser as upheld by
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
ATMCD is valid and I find no error in the same.
59. However, Deputy Commissioner MCD had erred in imposing
misuse/conversion charges vide the impugned order dated 15.3.2022,
it being beyond his powers. Accordingly, the said order directing the
appellant to deposit the misuse/conversion charges is hereby set
aside. Impugned order of ATMCD upholding imposition of the said
charges is also set aside.
60. Here I deem it necessary to mention that the perpetual lease
deed in respect of the premises in question was executed under the
Government Grants Act 1895 by the President of India through DDA
for industrial purposes. It is the President of India/DDA, who is the
lessor in the present case. Therefore, the President of India can
change the terms and conditions of the lease. DDA had issued
various notifications levying various charges including conversion
charges, parking charges etc., which permit change of industrial plot
to commercial use. Therefore, the said charges, which have been
specified through various notifications, can be recovered by DDA. It
needs to be mentioned that stand of DDA before ATMCD was that
Kirti Nagar has been denotified and now it is no more a development
area and therefore responsibility to recover conversion charges is
upon MCD. Thus the situation is that DDA is not recovering the
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
conversion charges and MCD has no power to levy and recover the
same. If DDA does not accept the conversion charges and convert
the terms and conditions of the perpetual lease, only course for MCD
is to proceed in accordance with Section 150 of DMC Act.
61. It will not out of place to mention that as per Section 347 of DMC
Act, Commissioner MCD can permit change of user of a building.
However, for imposing conversion charges or misuse charges, MCD
must comply Section 150 of DMC Act. In absence of a legislative
action under Section 150 of DMC Act, MCD can neither levy these
charges nor recover the same.
62. During appeal the appellant had deposited the conversion
charges with MCD subject to the outcome of this appeal. The
appellant would be entitled to refund of the same after one month
from this judgement.
63. I deem it necessary in interest of justice to grant 60 days time to
the appellant to approach DDA to get the terms and conditions of the
perpetual lease changed from industrial to commercial use, failing
which the MCD would be entitled to seal the premises in question till
the appellant agrees to use the premises in question for industrial
purposes only. It is reiterated that DDA can change the terms and
conditions of the perpetual lease, even if the area in which the
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Gurpreet Singh Vs. Municipal Corporation of Delhi (UOI) Judgement dt. 7.1.2025
premises lies is no more a developmental area. For example, it is
DDA only, who can make the leased plot freehold. Similarly, it can
change the terms and conditions of the lease deed and can also
accept the conversion charges as per its own notifications.
64. The appellant had pointed out some discrepancies in dates of
sealing order. However, this court being a second Appellate Court
cannot enter into examination of facts. Therefore, I have confined
myself to the legal issues arising in the present appeal and do not find
any need to express any opinion on the same as it would not affect
the outcome of the appeal.
65. Accordingly, appeal is partly allowed.
66. The judicial record of ATMCD and the record of MCD be
returned to their respective offices along with the copies of this
judgement.
67. Appeal file be consigned to record room.
Announced in the open Digitally signed by VINOD
court on 7.1.2025. VINOD KUMAR KUMAR
Date: 2025.01.07 15:33:20 +0530
(Vinod Kumar)
Principal District & Sessions Judge
West District, Tis Hazari Courts, Delhi
RCA DJ/11/2023 CNR No.: DLWT01-001681-2023 Page 40 of 40