MUNICIPAL CORPORATION RAJASTHANversusSANJEEV SACHDEVA AND OTHERS

                        [2013] 1 S.C.R. 220

A           MUNICIPAL CORPORATION RAJASTHAN
                                  v.
              SANJEEV SACHDEVA AND OTHERS
                 (Civil Appeal No.240 of 2013)
                         JANUARY 8, 2013
B
       [K.S. RADHAKRISHNAN AND DIPAK MISRA, JJ.]

         Rajasthan Municipalities Act 1959 [as amended by the
    Rajasthan Municipalities Amendment Act 1999 (Act No. 19 of
C   1999)) - s.173-A - Interpretation of - Power of the State
    Government to allow change in use of land on payment of
    conversion charges - Respondents filed application on
    16.7. 2003 for change of land use from residential to
    commercial - Corporation issued public notice inviting
D   objections - Later, the Land Use Committee met and
    approved the conversion for which a demand notice was
    raised by the Corporation on 2.4.2004 - Validity of the
    demand - Challenge to - High Court following the judgment
    of Supreme Court in Pareshar Soni's case held that the
E   Municipal Corporation was not empowered to demand any
    amount for change of use of the land - Whether the judgment
    in Pareshar Soni's case would apply to the demand notices
    issued by the Municipal Corporation on the basis of s.173-A,
    as amended by Act No. 19of1999 - Held: High Court erred
F   in applying the judgment in Pareshar Soni's case which was
    dealing with the un-amended provision of s. 173-A - In terms
    of the un-amended s. 173-A(1), conversion for change of Land
    Use charges could only be realized if the land was allotted
    by the Municipality or the State Government and there was a
G   condition for restraining use for a particular purpose only -
     Therefore, in the absence of land being allotted by the State
    Government/ Municipality and in absence of any specific
    stipulation regarding use of land, the conversion charges
    could not be claimed - This was the ratio laid down in

H                               220
     MUNICIPAL CORPORATION RAJASTHAN v.                   221
        SANJEEV SACHDEVA AND ORS.

Pareshar Soni's case interpreting the un-amended s. 173-A - A
The Legislature, with a view to ensure planned and regulated
development of the urban area felt it necessary to charge for
the change of use in certain circumstances of those lands
which were not sold or allotted by municipality or by the State
Government - Further it also felt that such a change of user B
be permitted only "in public interest" -Amendment was
necessitated since the State Legislature thought the provision
of s.173-A (un-amended) stood as an impediment for proper
planning of urban areas - With a view to ensure planned and
regulated development of urban areas, it was felt that some      c
restrictions have to be imposed and it was for that purpose
that s. 173-A was amended - In the case at hand, the demand
was legal and valid and in accordance with the provisions of
s. 173-A, as inserted by Amendment Act 19 of 1999 read with
the 2000 Rules - Rajasthan Municipalities (Change of Land 0
Use) Rules, 2000 - Rule 4(1).

    State of Rajasthan and others v. Pareshar Soni (2007)
14 sec 144 - held inapplicable.

     Mewa Ram v. State of Rajasthan 2007 (1) WLC (Raj) 1         E
- referred to.

                     Case Law Reference
  c2001) 14 sec 144         held inapplicable Para 5,8,9,1
                                              1,12,13,15         F
  2007 (1) WLC (Raj) 1      referred to          Para 7
     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 240
of 2013.
                                                                 G
    From the Judgment & Order dated 02.02.2009 of the High
Court of Rajasthan at Jodhpur in D.B. Civil Special Appeal No.
159 of 2009.

                                                                 H
    222       SUPREME COURT REPORTS              [2013) 1 S.C.R.


A                                WITH

    C.A. Nos. 242 & 241 of 2013.

        Dr. Manish Singhvi, AAG, Dharrnendra Kumar Sinha, Amit
    Lubhaya, Milind Kumar for the Appellant.
B
          Sushil Kumar Jain, Sachdeva, Pratibha Jain, Vikas Mehta
    for the Respondents.

          The following Order of the Court was delivered
c                              ORDER

          1. Delay condoned.

          2. Leave granted.

D         3. Heard learned counsel on either side.

       4. We are in these cases concerned with the interpretation
  of Section 173-A of the Rajasthan Municipalities Act 1959, as
  amended by the Rajasthan Municipalities Amendment Act 1999
E (Act No.19 of 1999), which deals with the power of the State
  Government to allow change in use of land on payment of
  conversion charges.

       5. The Division Bench of the Rajasthan High Court,
F following the judgment of this Court in State of Rajasthan and
  others v. Pareshar Soni (2007) 14 SCC 144, disposed of all
  the appeals, holding that the Municipal Corporation is not
  empowered to demand any amount for change of use of the
  Ian~. We may refer to the facts in Civil Appeal No.240 of 2013
  @ ~SLP(C) 11907 of 2009 for disposal of all these appeals,
G since common questions arise for consideration in all these
  appeals.

       6. Respondents herein purchased a plot of land, with a
  house, on 9.9.2002, situated in a residential area by way of a
H registered sale deed. Later, an application under the Rajasthan
      MUNICIPAL CORPORATION RAJASTHAN v.                    223·
         SANJEEV SACHDEVA AND ORS.
Municipalities (Change of Land Use) Rules, 2000 (for short         A
'2000 Rules") was preferred for conversion of land use from
residential to commercial. They also deposited self-
assessment amount of Rs.10,500/- for the said purpose.
Municipal Corporation, while considering the said application
gave a public notice on 22.7.2003 inviting objections, if any,     B
under Rule 4(1) of the 2000 Rules. The Land Use Change
Committee of the Corporation, on 23.2.2004, approved the
request for conversion of land use. Municipal Corporation then
demanded an amount of Rs.5,70,300/- as land use conversion
charges in accordance with the 2000 Rules read with Section        c
173-A, as amended.                ·

      7. Respondents herein filed a Writ Petition No.1844 of
2004 challenging the vires of amended Section 173-A of the
Act and to quash the demand notice dated 2.4.2004. In the
meanwhile another Writ Petition No.879 of 2003 was also filed      D
by one Mewa Ram challenging the vires of the amended
Section 173-A. The Division Bench of the Rajasthan High Court
vide its judgment in Mewa Ram v. State of Rajasthan reported
in 2007 (1) WLC (Raj) 1, was pleased to upheld the vires of
Section 173-A as inserted by Act No. 19 of 1999. Following         E
that judgment, the Division Bench of the Rajasthan High Court,
on 28.11.2007, remanded the matter to the learned single
Judge to decide whether the writ petition be entertained or not.
The case was later registered as D.B.C. Writ Petition No.430
of 2008.                                                           F
      8.The learned Single Judge, however, placing reliance on
the judgment in Pareshar Soni's case (supra) allowed the writ
petition and the notice dated 2.4.2004 was quashed, though it
was contended by the Corporation that the applicability of
Section 173-A (evidently as amended) was neither argued nor        G
considered by this Court in Pareshar Soni case. The Municipal
Corporation then took the matter in appeal before the Division
Bench in DB Civil Special Appeal No.159 of 2009. The court
dismissed the appeal holding that the issue raised stood
covered by the judgment in Pareshar Soni's case (supra).           H
    224       SUPREME COURT REPORTS               [2013] 1 S.C.R.


A      9. Dr. Manish Singhvi, learned Additional Advocate
  General, appearing for the State of Rajasthan submitted that
  the High court has committed an error in taking the view that
  the issue raised stood covered by the judgment of this Court
  in Pareshar Soni's case (supra). Learned counsel pointed out
B that this Court was dealing with the un-amended Section 173-
  A of the Act in that case, but, so far as the present appeals
  are concerned, applications have to be considered by the
  amended Section 173-A read with 2000 Rules.

        10. Mr. Susl:til Kumar Jain, learned counsel appearing for
C the respondents, on the other hand, submitted that there is no
  illegality in the judgment of the Division Bench of the High Court
  of Rajasthan warranting interference by this Court. Learned
  counsel submitted, in any view of the matter, the land in question
  falls in a commercial area as per the latest approved Master
D Plan and hence there is no question of paying any conversion
  charges.
      11. We are, in these cases, concerned with the question
  whether the judgment of this Court in Pareshar Soni's case
E (supra) would apply to the demand notices issued by the
  Municipal Corporation on the basis of Section 173-A, as
  amended by Act No. 19 of 1999.

       12. We may, at the very outset, point out that this Court in
  Pareshar Soni's case (supra) was dealing with the un-amended
F Section 173-A of the Act. For a proper consideration of the
  question raised, it would be profitable to refer to the un-
  amended Section 173-A as well as the amended Section 173-
  A of the Act. Section 173-A of the Act, prior to its amendment,
  reads as follows:
G
          "173-A (Power of the State Government to allow
          change in the use of land)

          (1) Notwithstanding anything contained in this Act, where
          any land has been allotted or sold to any person by a
H
    MUNICIPAL CORPORATION RAJASTHAN v.                      225
       SANJEEV SACHDEVA AND ORS.
   municipality or the State Government subject to the              A
   condition of restraining its use for a particular purpose, the
   State Government may, if it is satisfied so to do in public
   interest, allow the owner or holder of such land to use it
   for any other purpose other than the purpose for which it
   was originally allotted or sold, on payment of such              B
   conversion charges as may be prescribed.

          Provided that the rates of conversion charges may
    be different for different areas and for different purposes.

    (2) The conversion charges so realized shall be credited        C
    to the Consolidated Fund of the State or to the fund of the
    Municipality as may be determined by the State
    Government.

    (3) Such charges shall be the first charge on the interest · o
    of the person liable in the land the use of which has been
    changed and shall be recoverable as arrears of land
    revenue."

    Section 173-A of the Act as amended by the Amending
Act No. 19 of 1999 reads as follows:                                E

    "Section 173-A - Restriction on change of use of
    land and power of the State Government to allow
    change of use of land:
                                                                    F
    (1) No person shall use or permit the use of any land
    situated in any municipal area, for the purpose other than
    that for which such land was originally allotted or sold to
    any person by the State Government, any municipality, and
    other local authority or any other body of authority in         G
    accordance with any law for the time being in force or,
    otherwise than as specified under a Master Plan, wherever
    it is in operation.

    (2) In the case of any land not allotted or sold as aforesaid
    and not covered under sub-section (1), no person shall use      H
     226            SUPREME COURT REPORTS              [2013] 1 S.C.R.

A          or permit the use of any such land situated in a municipal,
           area for the purpose other than that for which such land-
           use was or is permissible, in accordance with the Master
           Plan, wherever it is in operation, or under any law for the
           time being in force.
B
           (3) Notwithstanding anything contained in sub-section (1)
           of sub-section (2), the State Government or any authority
           authorized by it by notification in the Official Gazette, may
           allow the owner or holder of any such land to have change
           of use thereof, if it is satisfied so to do in public interest,
c          on payment of conversion charges at such rates and in
           such manner as may be prescribed with respect to the
           following changes in use:-

            (i)      From residential to commercial or any other
D-                   purpose; or

            (ii)     From commercial to any other purpose; or
            (iii)    From industrial to commercial or any other purpose;
                     or
E
            (iv)     From cinema to commercial or any other purpose;

                  Provided that rates of conversion charges may be
           different for different areas and for different purpose.
F          (4) Any person who has already changed the use of land
           in violation of the provisions of this Act in force at the time
           of change of use, shall apply to the State Government or
           any authority authorized by it under sub-section (3), within
           six months from the date of commencement of the
G          Rajasthan Municipalities (Amendment) Act, 1999 (Act
           No.19 of 1999) for regularization of said use and upon
           regularization of the change of use of land he shall deposit
           the amount contemplated under sub-section (3).

H          (5) Where the State Government or the authority authorized
     MUNICIPAL CORPORATION RAJASTHAN v.                     227
        SANJEEV SACHDEVA AND ORS.
    by it under sub-section (3) is satisfied that a person who     A
    ought to have applied for permission or regularisation
    under this Section, has not applied and that such
    permission can be granted or the use of land can be
    regularized, it may proceed to determine the conversion
    charges after due notice and hearing the party/parties and     B
    the charges so determined shall become due to the
    municipality and be recoverable under sub-section (7).

    (6) The conversion charges so realized shall be credited
    to the fund of the municipality.
                                                                   c
    (7) Charges under section shall be the first charge on the
    interest of the person liable to pay such charges with
    respect to the land, the use of which has been changed
    and shall be recoverable as arrears of land revenue."
                                                                   D
     13. On a bare reading of un-amended Section 173-A(1)
of the Act would indicate that the conversion for change of Land
Use charges could only be realized if the land was allotted by
the Municipality or the State Government and there was a
condition for restraining use for a particular purpose only.       E
Therefore, in the absence of land being allotted by the State
Government/Municipality and in absence of any specific
stipulation regarding use of land, the conversion charges could
not be claimed. This was the ratio laid down in Pareshar Soni's
case (supra).interpreting the un-amended Section 173-A of the      F
Act. The Legislature, with a view to ensure planned and
regulated development of the urban area felt it necessary to
charge for the change of use in certain circumstances of those
lands which were not sold or allotted by municipality or by the
State Government. Further it is also felt that such a change of
user be permitted only "in public interest". In this connection,   G
we may refer to the Statement of Objects and Reasons of the
Amendment Act, 1999, which reads as under:

    "Statement of Objects and Reasons:
                                                                   H
    228        SUPREME COURT REPORTS                 (2013) 1 S.C.R.

A               The existing provisions contained in Section 173-A
          of the Rajasthan Municipalities Act, 1959 provide that
          where any land has been allotted or sold subject to the
          condition of restraining its use for a particular purpose, to
          any person by a Municipality or the State Government, the
B         State Government may, if it is satisfied so to do in public
          interest, allow the owner or holder of the land, to use it for
          any other purpose other than the purpose for which it was
          originally allotted or sold, on payment of such conversion
          charge as may be prescribed.
c               With a view to ensure planned and regulated
          development of the urban areas it is necessary to restrict
          and bar the change of use in certain circumstances of those
          lands also which were not sold or allotted by Municipality
          or the State Government. However, the power of the State
D         Government or any other authority authorized by it, to allow
          change of use of land, on payment of conversion charges
          is sought to be retained.

                 With a view to achieve the aforesaid objective, the
E         existing section 173-A of the Rajasthan Municipalities Act,
          1959 is proposed to be substituted."

        14. Amended Section 173-A not only restricts the change
  of use of land, as the same has been allotted by the municipality
  or the State Government, but also put restrictions if the land has
F been allotted by any other local authority. Section 173-A(2)
  covers the cases which are not even covered by Section 173-
  A( 1) and brings in its fold even the change of use of land which
  is not in consonance with the Master Plan. Further Section 173-
  A(1) (2) and (3) also contemplates a situation wherein the State
G Government is entitled to levy conversion charges if the change
  in use from one purpose to other purpose. Amendment was
  necessitated since the State Legislature thought the provision
  of Section 173-A (un-amended) stood as an impediment for
  proper planning of urban areas. In other words, with a view to
H ensure planned and regulated development of urban areas, it
      MUNICIPAL CORPORATION RAJASTHAN v.                     229
         SANJEEV SACHDEVA AND ORS.

was felt that some restrictions have to be imposed and it was        A
for that purpose that Section 173-A was amended.

     15. We may, in this respect, also indicate that, in exercise
of powers conferred under Section 297 read with Section 173-
A of the 1959 Act, 2000 Rules were promulgated. 1t is under          B
the above-mentioned Rules that the respondents filed an
application on_ 16.7.2003 for change of land use from residential
to commercial. Following those Rules, the Corporation issued
public notice inviting objections. Later, the Land Use Committee
met and approved the conversion for which a demand notice
of Rs.5,70,300/- was raised by the Corporation on 2.4.2004.          C
We are of the view that the demand is legal and valid and in
accordance with the provisions of Section 173-A, as inserted
by Amendment Act 19 of 1999 read with 2000 Rules. We are
also of the view that the Rajasthan High Court has committed
an error in applying the Judgment of this Court in Pareshar          D
Soni's case (supra) which was dealing with the un-amended
provision of Section 173-A.

     16. Learned counsel appearing for the respondents,
however, submitted that the area in question is notified as          E
commercial area under the Master Plan and, therefore, there
is no question of any conversion of the residential property to
commercial. We notice that this point was not raised before the
High Court and we are, therefore, not called upon to decide that
question. _However, the respondents, if so advised, may take         F
up this issue before the Corporation and it is for the Corporation
to consider that issue in accordance with law. Appeals are
accordingly allowed and the judgments of the High Court are
set aside. However, there will be no order as to costs.

B.B.B.                                         Appeals allowed.      G