REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

SPECIAL LEAVE PETITION(C)No.27278 OF 2009

Delhi Development Authority …    Petitioner   

Vs.

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Ram Prakash  …    Respondent

J U D G M E N T

ALTAMAS KABIR, J.

1. The Delhi Development Authority, hereinafter,  

referred  to  as  “DDA”  is  the  petitioner  in  this  

Special Leave Petition, which is directed against  

the judgment and order dated 2.5.2008 passed by the  

Delhi High Court in L.P.A. No.22 of 2008.

2. The respondent herein, along with his mother  

and wife, purchased a property in No.7, Community  

Center,  East  of  Kailash,  New  Delhi,  in  an  open  

auction  conducted  by  the  DDA  on  10.8.1969.  

Possession  of  the  plot  was  made  over  to  the  

purchasers on 5th March, 1972, and a lease deed in  

respect of the said plot was executed on 5th April,

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1972.  In terms of the Lease Deed, the auction  

purchasers were required to construct the building  

upon the demised plot within two years from the  

date of delivery of possession.  

3. It appears that on a routine inspection by the  

petitioner’s  staff  on  8th  August,  1983,  it  was  

noticed that the respondent was using the basement  

of the building for office purposes which was in  

contravention of the prescribed usage. A Show-Cause  

Notice was issued on the same day calling upon the  

respondent to Show-Cause within 10 days as to why  

action  for  cancellation  of  lease  should  not  be  

taken for violation of clause II(13) of the Lease  

Deed.  The respondent replied to the said Show-

Cause Notice on 10th August, 1983, denying misuse  

of the property.  No further action was taken on  

the said Show-Cause Notice till seven years later  

when on 28th June, 1990, another Show-Cause Notice  

was issued stating as to why the lease should not

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be determined for violation of clause II(13) of the  

Lease Deed on the ground that the basement of the  

building  was  being  misused  as  an  office  for  

Frooti/Atash Industry, instead of storage, and the  

mezzanine floor was being used for the office of  

M/s Ferrow Alloys Forging & M/s Green Land, instead  

of storage.   

4. In response to the second Show-Cause Notice the  

respondent  replied  stating  that  the  portion  in  

question  had  been  leased  to  the  above-named  

companies for storage purposes and their failure to  

abide by the terms of the lease has been brought to  

the notice of the tenants for taking appropriate  

steps.

5.Since the reply was not found to be satisfactory,  

further  Show-Cause  Notices  were  issued  to  the  

respondent on 3.9.1990 and 11.12.1990 in relation

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to the violation of the provisions of the Lease  

Deed  and  to  remove  the  breaches  which  had  been  

pointed out, in default whereof the lease would be  

determined.  The respondents replied to the Show-

Cause Notice dated 3.9.1990 on 5.11.1990 stating  

that the tenant was using the basement for storage  

of Frooti juices  and was not operating any office  

therefrom.  It was also mentioned that the tenant  

in the mezzanine floor had not yet replied to the  

notice which had been issued to him.

6.However, on the basis of another inspection of  

the premises conducted in December, 1990, where it  

was noticed that both the floors were still being  

misused, notices were issued for joint inspection  

which  was  fixed  for  18.2.1991,  12.3.1991  and  

22.4.1991.  However, the respondents did not join  

the  inspection  and  ultimately  an  inspection  was  

carried  out  on  24.4.1991  and  another  Show-Cause  

Notice was issued to the respondents on 8.5.1991.

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In  response  to  the  said  Show-Cause  Notice  the  

respondents wrote back on 21.5.1991 that they have  

no control over the tenants, except to inform them  

of their violations.  Ultimately, the respondents  

in  its  letter  dated  9.7.1991  stated  that  the  

mezzanine  floor  was  being  used  as  offices.   In  

reply to the said letter written on behalf of the  

respondent the petitioner informed the respondent  

that  as  per  architectural  design  the  mezzanine  

floor could be used only for storage and unless the  

misuse  was  stopped  the  lease  would  have  to  be  

determined.  In  response  on  13.11.1991  the  

respondent once again asserted that the mezzanine  

floor  in  the  Community  Centre  was  not  being  

misused.  

7.Thereafter, there was a series of correspondence  

exchanged on the same subject. In the meanwhile,  

Smt. Kamla Ahluwalia, the wife of the respondent,

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died on 23.4.1994, as did Smt. Saraswati Devi on  

6.8.1994.

8.On 20.5.2004 the respondent applied to the DDA  

for mutation of the property in favour of the legal  

heirs of the deceased co-auction purchasers.  In  

response thereto the respondents were asked by a  

letter dated 20.5.2004 to pay misuser charges and  

were  called  upon  to  clear  the  dues  in  respect  

thereof. Aggrieved by the said demand notice the  

respondents filed a Writ Petition, being W.P.No.  

8464 of 2006, in the High Court for quashing the  

demand  of  misuser  charges  amounting  to  

Rs.1,78,85,001/-.  The same was allowed by the High  

Court  on  17.8.2007  and  the  demand  of  misuser  

charges  raised  by  the  DDA,  by  its  letter  dated  

20.5.2004, was quashed.

9.The DDA filed Letters Patent Appeal, being LPA  

No.22 of 2008 on 12.12.2007, challenging the order

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of the learned Single Judge dated 17.8.2007, which  

was dismissed on 2.5.2008.  

10.It is against the said order of dismissal of the  

LPA by the Delhi High Court that this Special Leave  

Petition has been filed by the DDA.

11. Appearing for the DDA, Mr. A. Sharan, learned  

Senior  Advocate,  submitted  that,  although,  under  

the terms of the lease deed, the respondent was  

allowed  to  use  the  premises  for  commercial  

purposes,  he  had  misused  the  same  and  that  the  

premises  was  being  used  for  running  an  office.  

Furthermore, a construction had been raised on the  

terrace  which  was  unauthorized  and  in  direct  

violation of the lease agreement.  It was submitted  

that the misuser of the property came to the notice  

of the DDA during inspection, as such misuser of  

the demised premises had been carried on without  

notice to and the leave of the DDA.  Mr. Sharan  

also  submitted  that  as  many  as  14  Show-Cause

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Notices  had  to  be  issued  to  the  respondent  on  

account  of  such  misuser.   Since  the  respondent  

failed to comply with the requisitions contained in  

the  said  notices,  the  DDA  issued  a  notice  for  

Rs.1,78,85,001/-,  on  account  of  misuser  charges  

against which the respondent filed a writ petition,  

being W.P.(C)No.8464 of 2006, which was allowed by  

the learned Single Judge and the demand of misuser  

charges  raised  by  the  petitioner  by  its  letter  

dated 20th May, 2004, was quashed.     

12. The DDA filed Letters Patent Appeal No.22 of  

2008 against the said order of the learned Single  

Judge before the Division Bench which dismissed the  

same  on  the  ground  that  while  according  to  the  

petitioner-Authority, a portion of the premises was  

being used for office premises, according to the  

respondent  the  said  portion  of  the  premises  was  

being used only to store computers.  There was no  

office  as  such,  but  a  small  establishment  was

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maintained by the tenant for accounting purposes of  

the  goods  brought  to  the  premises  for  storage  

purposes only.  It was not as if a regular office  

was being run from the said premises.

13. As  far  as  the  other  part  of  alleged  misuse  

relating to construction raised on the terrace of  

the premises is concerned, it was stated on behalf  

of the respondent that such construction had been  

raised by the tenant without obtaining the sanction  

of the lessee and consequently, the respondent had  

initiated action against the said tenants for their  

eviction therefrom.

14. What also weighed with the Judge is the fact  

that  the  first  Show-Cause  Notice  issued  to  the  

petitioner was in regard to alleged misuse of the  

basement from 30th July, 1983, the mezzanine floor  

from  20th  June,  1990,  and  the  terrace  from  7th  

September, 1992, till 13th January, 2003.  However,  

although, the first Show-Cause Notice was issued to

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the  respondent  on  8th  August,  1983,  regarding  

misuse  of  the  basement  and  a  reply  was  also  

submitted by the respondent on 10th August, 1983,  

no decision was taken by the DDA on the said Show-

Cause Notice.  On the other hand, in June 1990,  

upon  an  alleged  inspection  by  the  DDA,  another  

Show-Cause Notice was issued to the respondent on  

28th June, 1990, only in respect of the alleged  

misuse  of  the  basement  and  the  mezzanine  floor.  

Despite a reply being sent, again no action was  

taken by the DDA except for issuing Final Notices  

to the respondent on 3rd September, 1990 and 11th  

December, 1990, requiring him to stop violation of  

the conditions of the lease deed, failing which it  

would be terminated.  The respondent sent a reply  

to the first Final Notice on 5th November, 1990,  

but again no decision was taken on any of the two  

Final  Notices  which  had  been  sent  to  the  

respondent.  Periodical inspection was thereafter  

carried out, but no action was at all taken by the

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DDA and its authorities against the respondent for  

alleged misuse of the premises in question.   

15. Ultimately, on a question of limitation being  

raised in respect of the demand of misuser charges,  

the Division Bench observed that where no period of  

limitation is prescribed, action has to be taken by  

the authorities within a reasonable period of time,  

but by no stretch of imagination, could it be said  

that after a lapse of almost 25 years that the DDA  

had not acted arbitrarily or at least unfairly in  

so  far  as  the  respondent  is  concerned.   In  

addition, the respondent was never informed by the  

DDA  that  he  was  required  to  pay  any  misuser  

charges.   On  the  basis  of  such  reasoning,  the  

Division  Bench  of  the  High  Court  dismissed  the  

appeal and upheld the order of the learned Single  

Judge.   

16. Mr.  Sharan  submitted  that  both  the  learned  

Single  Judge  and  the  Division  Bench  had

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misconstrued the principles relating to limitation  

in holding that the DDA had acted arbitrarily and  

unfairly in so far as the respondent was concerned,  

and,  in  any  event,  the  respondent  was  never  

informed by the DDA that he was required to pay  

misuse charges.   

17. Mr. Sharan urged that both the Single Judge and  

the  Division  Bench  of  the  High  Court  failed  to  

consider the core issue relating to the user of the  

premises in keeping with paragraph 13 of the lease  

deed  executed  by  the  DDA  in  favour  of  the  

respondent on 5th April, 1972.  In this regard Mr.  

Sharan referred to paragraph 13 of the lease deed  

which reads as follows :

“13) The  lessee  shall  not  without  the written consent of the lessor carry  on or permit to be carried on, on the  plot  or  in  any  building  thereon  any  trade or business of manufacture which  in opinion of the lessor may be noisy,  noxious  or  offensive  or  the  same  or  permit  the  same  to  be  used  for  any  purpose other than those specified or do  or suffer to be done therein any act or

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thing whatsoever which in the opinion of  the lessor may be a nuisance annoyance  or  disturbance  to  the  lessor  or  the  person living in the neighbourhood.

Provided that, if the lessee is desirous  of using the said plot or the building  thereon for a purpose other than those  specified  the  lessor  may  allow  such  change  or  user  on  such  terms  and  conditions  including  payment  of  additional premium and additional rent,  as  the  lessor  may  in  his  absolute  discretion determine.”  

18. Mr. Sharan submitted that having regard to the  

above, the respondent was not entitled to use the  

demised premises in a manner which was contrary to  

paragraph 13 of the lease deed.  It was contended  

that the respondent was carrying on a business in  

the demised premises in respect whereof there was  

no  feed  back  whatsoever  from  the  lessee.   Mr.  

Sharan urged that the order of the learned Single  

Judge  dated  17th  August,  2007,  could  not  be  

sustained and the same was liable to be set aside,  

along with the order of the Division Bench impugned  

in the Special Leave Petition.  

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19. Appearing  in  person,  the  respondent,  on  the  

other  hand,  submitted  that  after  the  Show-Cause  

Notices were issued no action whatsoever was taken  

on  the  basis  thereof  and  all  of  a  sudden  the  

exorbitant  misuser  charges,  amounting  to  

Rs.1,78,85,001/- was demanded from him.  Professor  

Ram Prakash submitted that from 1983, nothing had  

been done by the DDA on the basis of the Show-Cause  

Notices  which  had  been  issued,  to  which  the  

respondent had promptly replied stating that the  

construction on the terrace had been effected by  

the tenants and not by him and in respect whereof  

proper  proceedings  had  been  initiated  for  their  

eviction  from  the  premises.  The  respondent  

submitted that it is only under severe compulsion,  

that he had to move the Writ Court for relief in  

relation  to  the  demand  of  misuser  charges  of  

Rs.1,78,85,001/-.   The  respondent  submitted  that  

for the last 25 years he had been made to face

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various problems and uncertainties, but that it was  

entirely  unjustified  on  the  part  of  the  DDA  to  

raise  the  claim  of  alleged  misuser  charges  of  

Rs.1,78,85,001/-.  The  respondent  submitted  that  

after a long period of 25 years, a quietus was  

required to be given to the matter.   

20. The respondent submitted that after issuance of  

Show-Cause  Notices,  the  DDA  should  have  taken  

further  steps  in  the  matter  within  a  reasonable  

time  and  that  too  relating  to  misuser  chargers  

where  he  was  not  at  fault.   The  respondent  

submitted that he had taken prompt steps not only  

to reply to the Show-Cause Notices issued to him,  

but to initiate action against the tenants who had  

used the property in a manner which was different  

from the purpose for which the property had been  

let out.  The respondent submitted that this was a  

case where both the learned Single Judge and the  

Division Bench decided the matter in the crucible

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of  events  peculiar  to  the  facts  of  this  case,  

having  particular  regard  to  the  length  of  the  

period  for  which  the  misuser  charges  had  been  

demanded.   

21. Having  considered  the  submissions  made  on  

behalf of the DDA and by the respondent appearing  

in-person, and also having considered the reasoning  

of the learned Single Judge and the Division Bench  

in repudiating the claim of misuser charges by the  

DDA, we are unable to convince ourselves that the  

decisions rendered by the High Court, both by the  

learned Single Judge as also the Division Bench,  

require any interference in these proceedings.  The  

materials on record will show that the respondent  

took  prompt  steps  against  the  tenants  for  their  

transgression.  During arguments it was indicated  

that,  in  fact,  one  of  the  tenants  had  already  

vacated  the  portion  of  the  premises  occupied  by  

him.  It is also very clear that after issuing the

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Show-Cause Notices, the petitioner did not take any  

follow-up action thereupon.  Instead, after a lapse  

of  25  years,  the  petitioner  set  up  a  claim  on  

account of charges for the entire period.  It would  

be inequitable to allow the petitioner which had  

sat  over  the  matter  to  take  advantage  of  its  

inaction in claiming misuser charges.

22. Even as to the contention raised on behalf of  

the  petitioner  that  there  was  no  limitation  

prescribed for making a demand of arrear charges,  

the Division Bench relying on the decision of this  

Court  in  State  of  Punjab  &  Ors.  Vs.  Bhatinda  

District  Cooperative  Milk  Producers  Union  Ltd.  

[(2007) 11 SCC 363], observed that even where no  

period of limitation is indicated, the statutory  

Authority is required to act within a reasonable  

time.   In  our  view,  what  would  construe  a  

reasonable  time,  depends  on  the  facts  and  

circumstances of each case, but it would not be

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fair to the respondent if such demand is allowed to  

be  raised  after  25  years,  on  account  of  the  

inaction of the petitioner.

23. We  do  not,  therefore,  find  any  reason  to  

interfere with the judgment either of the learned  

Single Judge or of the Division Bench of the High  

Court  and  the  Special  Leave  Petition  is,  

accordingly, dismissed.

24. There will, however, be no order as to costs.   

…………………………………………J. (ALTAMAS KABIR)

…………………………………………J. (CYRIAC JOSEPH)

New Delhi Dated: 15.03.2011