Calcutta High Court (Appellete Side)Dinabandu Andrews Institute Of ... vs Kolkata Metropolitan Development ... on 16 July, 2018Author:Arindam SinhaBench:Arindam Sinha1


16.07.2018Court No.04
Item no.08
skcW.P. 2051 (W) of 2016


                     Dinabandu Andrews Institute of Technology & Management
                                               Vs.
                           Kolkata Metropolitandevelopment Authority & Ors.




                     Mr. B.R. Bhattacharjee, Sr. Adv.Mr. R.N. Chakraborty
                     Mr. M. Ahmed            ... for the petitioner

                     Mr. Partha Sarathi Basu
                     Mr. S. Talukdar         ... for the KMDA



                     This writ petition on      being   moved   resulted   in   record   ofsubmissions in order dated 19th June, 2018 as are reproduced below:"KMDA granted licence on 28th September, 2008 to the Institute.Clauses 2 and 4(iii) are set out below:"2. The License under this deed shall be deemed to commence
                         on the date of these presents and possession shall continue to
                         be operative till the execution and registration of a deed of
                         lease in respect of the above mentioned land between the
                         Authority and the licensee or till the expiry of the period of 99
                         (Ninety Nine) years from the date of its commencement,
                         whichever event occurs earlier.4(iii) At the own cost of the Licensee, within 24 months from
                         the date of issue of allotment letter or within such further
                         time as the Authority may as its option allow in writing on
                         sufficient and reasonable grounds, to start Construction for
                         the purpose of setting up an Institution for opening MBA
                         Baishnabghata Patuli Area Development Project with
                         boundary walls boundary walls, sewers and drains in
                         accordance with plans, sanctions and specifications as shall
                         be approved by the appropriate authorities on payment of
                         such fees as required, in accordance with the Building Rules
                         of the Kolkata Municipal Corporation, with the requirement of
                         any Land Use and Development Control Regulations of the2Authority or the requirements of any other statutory rules
           and regulations of local or statutory body framed for the
           purpose and licensee shall complete the construction works of
           the project within 36 months from the date of issue of
           allotment letter."Failure on the part of the Licensee to start construction
           within two years or within the time as extended by the
           AUTHORITY and/or complete the construction works of the
           project within three years from the date of issue of allotment
           letter of the plot of land, the License shall be terminated by
           the AUTHORITY, with deduction of 20% of premium as paid
           by the Licensee as service charge and remaining amount shall
           be refunded without any interest thereon.Mr. Bhattacharjee, learned senior advocate appears on behalf of

petitioner and submits, it is a deemed sale.Provisions of Transfer of

Property Act, 1882would apply to the parties. He submits, the authority

may at its option allow, in writing on sufficient and reasonable grounds,

further time to start construction for setting up the Institute. On failure on

the part of his client to start construction within time as extended or

completed within three years from the date of issue of allotment letter on

the plot of land, the licence can be terminated by the authority with

deduction of 20% of premium as service charge. It cannot do anything else.He refers to impugned demand dated 14th Janurary, 2010 which

is a demand for penalty amount at the rate of current rate on value of the

land, which, according to him, cannot be sustained as issued on the basis

of either the licence or statutes. He relies on judgment of Supreme Court inAndhra Pradesh Industrial Infrastructure Corporation Limited and

others v. S.N. Raj Kumar and anotherreported in AIR 2018 SC 1981,

in particular to paragraph 16 which is set out below:"16.Section 55of the Act deals with rights and liabilities of
           buyer and seller. As per this provision, when the buyer
           discharges obligations and seller passes/conveys the3ownership of the property, the contract is concluded.
           Thereafter, the liabilities, obligations and rights, if any,
           between the buyer and seller would be governed by other
           provisions of theContract Act and the Specific Relief Act, on
           the execution of the sale deed. The seller cannot unilaterally
           cancel the conveyance or sale."He also relies on judgment of a Division bench of this Court inKolkata

Municipal Corporation vs. Gopallal Bhatter reported in 2011(3) CHN

(CAL) 589, to paragraph 24 therein which is set out below:"24. The learned Single Judge, in our opinion, has rightly
           disallowed the imposition of penal rates by application of
           penal multiplier in calculating the retention charges for
           sanction of the unauthorized construction of the building in
           question as there is no provision whatsoever in theKolkata
           Municipal Corporation Actand/or Rules framed thereunder
           for imposition of such penal rate for the purpose of allowing
           the retention of unauthorized construction."Mr. Talukdar, learned advocate appears on behalf of KMDA and

relies on judgment dated 8th May, 2018 of another Division Bench of

this Court in, inter alia, FMA 59 of 2018 (Kolkata Metropolitan

Development Authority & Anr. South City Projects (Kolkata)

Limited & Anr.) to submit,the said judgmentis one on similar facts. It

binds this Court and thus there should be no interference. Mr.

Bhattacharjee points out the views expressed therein are prima facie."Today Mr. Talukdar refers to impugned demand and points out,

the institute had not only sought instalments to pay part of it but also

applied for   further time to pay and waiver. As such the institute is

estopped from challenging the demand. He relies on three judgments of

Supreme Court. They are inGalada Power and Telecommunication4Limited vs. United India Insurance Company Limited and Anotherreported in (2016)14 SCC 161, paragraphs 14 to 17;B.L. Sreedhar and

others vs. K.M. Munireddy (Dead) and Othersreported in (2003)2

SCC 355; and Sunderabai W/o Devrao Deshpande and Another vs.

Devaji Who Calls Himself as the Adopted Son of Shankar Deshpande

reported in AIR 1954 SC 82.Reliance onGalada Power and

Telecommunication Ltd.(supra) is on the point of waiver. Mr.

Talukdar submits, even if petitioner had any right, it by accepting the

demand in as much as by seeking instalment and making part payment

etc., has waived its such right. Relying on other two judgments, he

submits, petitioners are estopped by conduct. There should be no

interference.He seeks to distinguishS.N. Raj Kumar(supra) by

submitting, in this case there has not been a transfer. Petitioner is in

permissive possession. Lease deed has not yet been executed nor

registered. Hence, reliance on paragraph 16           of the judgment for

application ofsection 55inTransfer of Property Act, 1882is

misconceived.In reply Mr. Bhattacharjee relies on judgment of a Division

Bench of this Court in Asian Leather Limited & Arn. Vs. The Kolkata

Municipal Corporation & Ors. reported in (2007) 3 WBLR (Cal) 195 to

praragraphs 7, 18, 44, 45 and 48. He submits, his client made the

payment under mistake of law. There can be no estoppel against law and

there has been no waiver on the part of his client.The rights of parties are governed by the licence. There is no

dispute regarding that. Under clause 4(iii), the authority reserved to itself5right of exercise of option to allow in writing, on sufficient and

reasonable grounds for delay, for the licencee to start construction for

purpose of setting up an institute for opening MBA course study. Such

construction is to be made in accordance with plans, sanctions and

specifications and thereafter approved by the appropriate authorities on

payment of such fees as required, in accordance with the building rules

of, inter alia, Kolkata Municipal Corporation. Impugned demand however

has no reference to this clause in the licence. On approval by competent

authority, petitioner was requested to deposit Rs. 59,69,880/- as penal

charge for extension of time in the period from 23rd March, 2009 to 30th

June, 2010.Reserving option to extend time is a right conferred upon the

authority under the licence. Question of waiver on the part of petitioner

does not arise. Approval of competent authority to authorise request to

pay penalty for extension of time sought by the institute must flow from

said or some other clause in the licence. Such authority is to be derived

from the contract between parties. The contract by licence does not

provide for liquidated damages for exercise of this option by the

authority.S.N. Raj Kumar(supra) was for the purpose of reliance on

proposition that liabilities, obligations and rights, if any, would be

governed by other provisions of Contract and Specific Relief Acts upon

execution of deed. If the authority contends since there is no deed,

contract law will not apply, it has failed to demonstrate before this Court

that the licence has been revoked.6The authority's right to claim to impose penalty does not find

basis in the licence. As such petitioner having paid a part of the demand

cannot thereby give sanctity to the demand. Mr. Bhattacharjee's

contention is accepted that payments were made under mistake of law.The authority having proceeded to grant the extension, challenge

of petitioner is only against the imposition. For reasons aforesaid writ

petition succeeds. There will be an order in terms of prayer (a) of writ

petition. Writ petition is disposed of accordingly.(Arindam Sinha, J.)