UNION OF INDIA AND ORS.versusDEV RAJ GUPTA AND ORS.

                       UNION OF INDIA AND ORS.
A
                                         v.
                       DEV RAJ GUPTA AND ORS.

                              OCTOBER 23, 1990

B             [P.B. SAWANT AND K. RAMASWAMY, JJ.]

           Delhi Development Act, 1957: Section 7-Town planning-
    Master Plan-Land leased by Government-Conversion of user-
    Residential to commercial-Application and enquiry-Difference
    between-Absence of prescribed form-Relevance of- levy of conver-
C   sion charges-Reckoning of relevant date-Region in which the leased
    land situated-Declared to be commercial zone-Land user-Whether
    results in automatic and statutory conversion.

          The land in this ca~e was leased by the Government to one R in
    1931 and a regnlar lease deed was drawn in 1938. It was a perpetnal
D   lease. The lessee constructed a residential bnilding on the land, and
    assigned the lease in favour of one L. On the death of L, the interest in
    the lease devolved on the respondents. Respondent No. 1 sent a letter
    through his Advocate to the Land & Development Officer, stating that
    he proposed to construct a multi-storeyed building demolishing the
    bungalow md demanding to know the charges for conversion of the
E   land use from residential to commercial purposes. The Land & Develop..
    ment Officer replied that the letter was receiving attention. Actually the
    names of the respondents were mutated in the property register after
    the exchange of the above letters. However, no application for conver-
    sion of the land user was made on behalf of the lessees of the land.

F         Again in 1978 the parties sent a letter to the Land & Development
    Officer demanding to know the terms for construction of a commercial
    building on the lease land and the charges to ~ paid for the same. The
    Assistant Settlement Commissioner sent a reply requesting that a for-
    mal application he made in the prescribed proforma for permission to
    construct multi-storeyed commercial building duly signed by all the
G   co-lessees. In 1980 a reminder was sent to the parties. Only thereafter
    the parties filed an application in the prescribed form. In 1984, the
    Government intimated the parties that it was willing to comply. with the
    request, provided the parties were willing to abide by certain terms and
    conditions in advance.

H         The parties made a representation to the Works & Housing Minis-

                                       300
                          U.0.1. v. D.R. GUPTA                        301

ter requesting for ·reconsideration of the terms and conditions. After a
good deal of correspondence the Government rejected the representa-
                                                                             A
tion. Thereafter the parties approached the High Court by way of a
Writ Petition challenging the terms and conditions imposed by the
Government. It was contended that since they applied for permission to
convert the user of land on 15.2.1978, they were liable to pay charges
calculated with reference to that date only; that no charges for misuse of   B
the land could be levied after 15.2.1978; that no interest could be
charged on the alleged additional premium which .was calculated by
taking into consideration May 25, 1981 as the base date. Accepting the
contentions, the High Court held that there was no need to make any
application for conversion after 1962 when the Master Plan was pre-
pared by the Delhi Development Authority declaring the region as a
commercial zone and that the conversion was automatic and statutory.         c
The High Court held that the Respondents were not obliged to make the
payment of conversion charges calculated at rates prevalent in April,
1984 instead of the rates obtaining in February, 1978. It directed the
Government to recompute the additional premium and other charges.
                                                                             D
      Aggrieved by the High Court Judgment, the Government prefer-
red the present appeal. The same contentions as were raised in the High
Court were advanced before this Court, by both the parties.

      Allowing the appeal, this Court,
                                                                             E
       HELD: 1. The land has to be used as per the agreement between
the contracting parties, and no change of the user can be made contrary
to the agreement even if the Master Plan permits such user. The Plan
helps the parties to change the user, if the parties mutually agree to do
so. It does not permit the occupant to change the user unilaterally. It is
not,· therefore; ·correct to say that no permission of the landlord was      F
n~ded to change the user of the land. The High Court is not right in
holding that there was an automatic or a statutory conversion of the
user of the land because in the Plan the land in question fell in the area
reserved for commercial use. The High Court failed to appreciate that
the change of user of the land permitted by the Plan was only enabling
in nature. It lifted the restriction which was otherwise there for using     G
the land for commercial purpose. [312B-C & A]

     2. All that the parties wanted to know from the Land & Develop-
ment Officer were the terms and conditions for the construction of a
commercial building on the land and the charges to be paid for the
same. This can hardly be called an application for permission to con-        H
    302          SUPREME COURT REPORTS                  [19901 Supp. 2 S.C.R.

    struct a commercial building on the land. It is no more than an enquiry.
A   It is immaterial in this connection whether any regular form of applica-
    tion was prepared and was available for use at the relevant time. Even
    assuming that such a form was prescribed for the fll'St time on June 15,
    1978, the letter of February 15, 1978 could hardly be described as an
    application signed by the lessees-meaning thereby all the l~for
B   permission to convert the user of the land. The absence of a prescribed
    form does not make the letter the required application. The least that is
    expected in an application for the purpose is a request by all the lessees
    to permit the change of the user of the land showing readiness and
    willingµess to abide by the terms and conditions for such conversion or
    the user. The letter in question, on the other hand, did nothing more
    than make an enquiry suggesting that the application for the change of
c   the user would be made after the terms and conditions including the
    charges for the same are known. Thus, the letter of February 15, 1978 W&'I not
    an application made for the change of the user of the land. [J®F·H; 310A·B]

          3. It is clear from the authority's letter dated March I, 1980 that.
D   different persons were seeking permission for change of the user of the
    land and some of them were not even the co-lessees of the land. Since
    there was no firm application by the authorised person or persons for
    conversion of the user of the land the authority had asked the lessees to
    sent the application in the prescribed form duly signed by all the co-
    lessees. There was no reply to this letter of March 1, 1980 and hence a
E   reminder was sent by the authority on June 3, 1980 warning the lessees
    that in case no reply was received from them within 15 days, the matter
    would be treated as closed. It is pursuant to this reminder that. on
    February 27, 1981 a letter accompanied by an application in the pre-
    scribed form was sent, and both the letter as well as the prescribed form
    were duly signed for the first time by all the co-lessees. The contents of       i
F   the accompanying letter make it clear that even the lessees treated this
    application as the first duly-made application for the purpose. As bas
    been stated in the application, the plans for the construction of the
    commercial building were sanctioned only on January 21, 1981 and the
    exemption application made to the competent authority under Section
    20(1) of the Delhi Development Act, 1957 was even then still under
G   process. It is in response to this application that the sanction was given
    by the authority on January 12, 1984 to convert the user of the land.
    Thus, it was only on February 27, 1981 that an application for the
    change of the user of the land was made by or on behalf of the
    respondent-lessees of the land. [310G·H; 311A·D]

H         4. There is no explanation given by the appellants as to why the
                    U.0.1. v. D.R. GUPTA [SAWANT, J.I                  303

 application made by the respondents on February 27, 1981 was not
·replied to till Jannary 12, 1984. Hence In the absence of anything else on
 record, it will have to be taken that the date with reference to which
 conversion charges have to be counted is 27th February, 1981. [311E]

      5. The additional premium should be calculated by the appeUants
on the basis of the rate which was prevalent as on February 27, 1981          B
which is the date of the application made for the change of the user. The
interest should be charged on such additional premium w .e.f. 12th
April, 1984 since a period of three months from the date of notice, viz.,
January 12, 1984 was available to the respondent-lessees to make the
payment of the additional premium. The respondent-lessees would not
be entitled to convert the present user of the land into the commercial
user unless and until the last of the three annual instalments of the         c
additional premium together with the interest thereon is paid. [312C-E]

     6. The respondents will further be liable to pay the misuse
charges mentioned at items 6 and 7 of the notice of 12.1.1984 till 12th
April, 1984 from which date, they would be paying the conversion              D
charges. [312F]

      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1996
of 1990.

     From the Judgment and Order dated 14.9.1989 of the Delhi High            E
Court in Civil Writ No. 2038 of 1988.

    T.S. Krishnamurthy Ayer, T.V.S.N. Chari and C.V. Rao for the
Appellants.

      Ashok Grover and V.N. Kaura for the Respondents.                        F

      The Judgment of the Court was delivered by

      SAW ANT, J. This appeal raises some questions which are
important both for the Delhi Administration as well a> for their lessees
of land. Shortly stated, the questions involved are: (a) what constitutes     G
an application for permission to convert the user of the land? (b) from
which date the conversion charges are leviable? and (c) from which
date interest is chargeable on the conversion charges?

    2. The land involved in the present case is at 20, Barakhamba
Road, New Delhi and admeasures about 0.956 acre. It was leased by             H
    304         SUPREME COURT REPORTS               [1990] Supp. 2 S.C.R.

    the Governor General in Council to one Smt. Rama Bai on November
A
    17, 1931. The regular lease-deed was drawn up in 1938. It was a
    perpetual lease given on a premium of Rs.8,000 at the annual rent of
    Rs.400. Smt. Rama Bai constructed a residential building on the land.
    On May 20, 1938, Smt. Rama Bai assigned the lease in favour of Smt.
    Leelawati who died on November 6, .1969. The interest in the lease
B   devolved on respondents 1-4 and one Hans Raj Gupta and their names
    were mutated in the record of rights as is evidenced by the Govern-
    ment Memo of November 21, 1977. Hans Raj Gupta died on July 31,
     1985. Respondents 5-11 are his heirs and legal representatives. It
    appears that Hans Raj Gupta had left a will. It is the subject matter of
    probate proceedings in Suit No. 62 of 1985 which is being contested. If
    the will is probated then share of the late Hans Raj Gupta will devolve
c   upon respondents 6-9; otherwise, it will devolve on all his heirs, viz.,
    respondents 5-11. For the purpose of the questions to be answered in
    this appeal, we are not much concerned with the devolution of pro-
    perty after the death of late Hans Raj Gupta.

D        3. In September 1962, the Delhi Development Authority pre-
    pared a Master Plan for Delhi under Section 7 of the Delhi Develop-
    ment Act, 1957 (hereinafter referred to as the "Act").

          4. Before the names of respondents 1-4 and the late Hans Raj
    Gupta were mutated in the property register on November 21, 1977, a
E   letter was written on April 25, 1977 by one of the lessees-to be
    precise, by the first respondent, through an advocate, to the Land &
    Development Officer which read as followso

                " ..... My client Shri Dev Raj Gupta son of late Smt.
                Leela Gupta proposes to construct a multi-storeyed build-
F               ing on the above mentioned plot. Please let me know the
                charges, if any, payable for conversion cif the land use from
                residenti.al to commercial for constructing a multi-storeyed
                commercial building on the said plot after demolishing the
                existing bungalow constructed on the abovesaid plot.

G                    Your early response in the matter shall highly be
                appreciated.

                      Thanking you,


H         We do not have on record reply, if any, sent to this letter. But it
                        U.0.1. v. D.R. GUPTA [SAWANT, J.]                 305

      appears that there was some letter of the same date, viz., April 25, A
      1977 addressed by "the heirs and executors" of the estate of [ate Smt.
      Leelawati Gupta, C/o Shri Prem Shankar, Advocate, i.e., the very
      same advocate who had written the letter earlier alluded to on behalf
      of the first respondent, and a reply was given by the office of the Land
      & Development Officer on July 29, 1977 to this letter of the "heirs and
                                                                                 B
      executors etc." stating therein that their letter was receiving attention.
      What that letter was has not come on record. The only development
      thereafter was, as stated earlier, the Government Memo of November
      21, 1977 communicating that the names of respondents 1-4 and of the
      late Hans Raj Gupta were mutated in the property register against the
      leased land. It may be mentioned here that this Government Memo
      was addressed to the late Hans Raj Gupta and respondents 1-4 care of ~·
       the said Advocate, Shri Prem Shankar. We are informed at the Bar·
       that the request for such mutation was made on October 12, 1972 on
       the basis of a partition deed of December 15, 1970 after the death of
       Smt. Leelawati on November 26, 1969. What is important to note from
      the developments so far, as far as the issues involved in this appeal are
                                                                                 D
      concerned, is that no application for conversion of the land was made
      on behalf of the lessees of the land.

           5. On February 15, 1978, the late Hans Raj Gupta, for himself
...   and "Dev Raj Gupta and others", wrote a letter to the Land &
      Development Officer stating therein as follows:
                                                                                E
                        "Under the Master Plan and the Zonal Plan the
                  above plot now residential can be developed for the con-
                  struction of a Commercial building.

                        Please Jet me know your terms in respect thereof
                  together with commercialisation charges that will have to     F
                  be paid by us.
              \
                      The plans have already been submitted to the
                  N.D.M.C. after their approval by the Urban Land Art
                  Commissoner.
                                                                                G
                                                           Yours faithfully,
                                                                       S/-d
                                                           Hans Raj Gupta
                                                       for Hans Raj Gupta,
                                                 Dev Raj Gupta and Others"
                                                                                H
    306          SUPREME COURT REPORTS                 [1990] Supp. 2 S.C.R.

          We have then on record a letter dated March I, 1980 a<'dressed
A
    by the Assistant Settlement Commissioner to !he lessees as follows:
               '. "To
                        S/Shri Hans Raj Gupta,
                        Dev Raj Gupta, Prem Raj Gupta
B                       Pardeep Kumar Gupta,
                        C/o Shri Hans Raj Gupta,
                        3-Ratendon Road,
                        New Delhi.

                        Sub: Premises situated on Plot No. 5, Block No. 205
                             known as 20-Barakhamba Road, Ne"w Delhi.
c
                 Dear Sir,

                       I am to say that the applications in respect of the
                 above mentioned premises received so far from different
D                persons (some of them are not co-lessees) to intimate
                 conversion charges for the construction of Multi-storeyed
                 Commercial building and your intention to sell the,pro-
                 perty to M/s. Central Investment (P) Ltd. and the United


E
                 Towers India (Pvt.) Ltd. but rejection of the same by 'he
                 Competent authority under Urban (Ceiling & Regulation)
                 Act, 1976 have created some doubts about that ownership.
                 It has therefore been decided that a fresh application for the
                                                                                  -
                 permission to construct the Multi-storeyed Building duly
                 signed by all the co-lessees be asked for.           .1

                       You are therefore requested to make an application
F                in the prescribed profo1ma for the permission to construct
                 the Multi-storeyed Commercial building duly signed by all
                 the co-lessees.

                                                            Yours faithfully,
                                                                         Sid
G                Encl. As above.                              (R.L. Gupta)
                                          Asstt. Settlement Commessioner".

          On June 3, 1980, a reminder was sent by the Government to the
    late Hans Raj Gupta and respondents 1-4 which reads as follows:
           '
H                " ..... I am to refer to this Office Letter No. LI-9/205(5)/
                          U.0.1. v. D.R. GUPTA [SAWANT, J.l                 307

                   80/197 dated 1.3. 1980 on the above subject and to say that     A
                   no reply thereto has to far been. (sic.)

                         In case no reply is received from you within 15 days
                   from the said date of receipt on this letter, then it will be
                   presumed that you are not interested for the permission to
                                                                                   B
                   construct the multi-storeyed Commercial Building and the
                   case will be treated as closed ..... "

               To this reminder, the late Hans Raj Gupta replied that the letter
        of March 1, 1980 sent by the Government appeared to have been lost
        in transit and did not reach their bands and requested for a duplicate of
        the same to enable them to take necessary steps. The Government by C
        its letter of August 11, 1980 sent a copy of its letter of March I, 1980
        and along with it also sent to the late Hans Raj Gupta and others a
        show cause notice dated May 31, 1980 which had also been received
        back by the Government undelivered. Thereafter, on February 27,
         1981, the late Hans Raj Gupta, and one Raj Kumar Gupta as a con- D
        stituted Attorney for respondents 1-4, sent an application in the pre-
        scribed form. In the accompanying letter of the same date, if was
        mentioned that the application was sent with reference to the Land &
        Development Officer's letter dated March I, 1980 and the discussions

-   .
        held in his office on February 9, 1981 for permission to construct a
        multi-storeyed building. All that is necessary for us to note from the
        contents of the application-form is firstly that it was mentioned there E
        against the relevant query that the plan for constructing commercial
        building was sanctioned on January 21, 1981 by the New Delhi Munici-
        pal Committee and that exemption application under Section 20(1) of
        the Urban Land (Ceiling & Regulation) Act, 1976 was being proces-
        sed. On January 12, 1984, the Government intimated to the parties
        that with reference to their letter of February 27, 1981 seeking permis- F
        sion for construction of multi-storeyed commercial building, the
        lessor, i.e., the Government was willing to consider their said request
        provided they were willing to comply with the terms and conditions
        mentioned therein full in advance. The terms and conditions men-
        tioned in this communication included, among other things, the
        payment of additional premium of Rs.1,77,31,548 in lumpsum and G
        payment of interest on the additional premium at IO per cent per
        annum from 27th May, 1981 to 14th July, 1983 being Rs.37,84,349 .55
        and from 15th July, 1983 to the date of payment, at Rs.1,47 ,762.90 per
        month. The other terms and conditions imposed by the said letter are
        not in'dispute and, therefore, they need not be reproduced here.
                                                                                  H
    308         5UPREME COURT REPORTS                [1990] Supp. 2 S.C.R.

          6. On receipt of this letter, the late Hans Raj Gupta and other
A
    lessees made a representation on March 31, 1984 to the Works &
    Housing Minister of the Government of India requesting reconsidera-
    tion of the terms and conditions imposed in the Government's letter of
    permission of January 12, 1984. It appears that thereafter there was a
    correspondence between the parties which finally culminated in the
B   Government's letter of June 12, 1987 which virtually rejected the rep-
    resentations of the lessees. Further representations were made there-
    after for reconsideration of the terms and conditions offered by the
    Government for conversion of the use of the leased land but it appears
    that they were not replied to. The result was that the lessees
    approched the High Court by a writ petition challenging the appel-
    lant's letter dated June 12, 1987 reiterating the terms and conditions
c   which were intimated earlier by the letter of January 12, 1984.

           7. The main challenge in the petition was to the base year for the
    calculation of the charges for conversion of the land from the residen-
    tial to the commercial purpose. It was the contention of the petitioners
D   that since they had applied to the respondents for permission to con-
    vert the user on February 15, 1978, they were liable to pay charges
    calculated with reference to the said date and not as the respondents
    had done with reference to May 25, 1981. Their second contention was
    that for the same reason no charges for the misuse of the land could be
    levied after February 15, 1978 and their third contention was that no
E   interest could be charged on the alleged additional premium which was
    calculated by taking into consideration May 25, 1981 as the base date.
    The High Court accepted all the said three contentions by holding that
    the date with reference to which the conversion charges had to be
    calculated was February 15, 1978 when according to the court the
    respondents had duly applied for conversion of the user. The High
F   Court also held that in fact there was no need to make any such
    application for conversion after September 1962 when the Master Plan
    was prepared by the Delhi Development Authority declaring the
    region in which the leased land was situate as a commercial zone.
    According to the court, there was an automatic and statutory conver-
    sion of the use of the land from residential to commercial purpose and
G   hence there was no question of either payment of conversion charges
    or the misuse charges. In this view of the matter the court held that the
    demand which had been made oy the appellants for conversion charges
    calculated on the basis of the rate prevalent in April, 1981 instead of
    the rate prevalent on February 15, 1978 was not in accordance w,ith law
    and the respondents were not obliged to make the payment pursuant
H   to an invalid demand. The High Court, therefore, quashed the
-·                       U.0.1. v. l).R. GUPTA [SAWANT, l.]                  309

     demand for conversion charges contained in the appellants letters
     dated January 12, 1984 and June 12, 1987 and directed the appellants           A
     to recompute the additional premium and other charges within a
     period of six months in accordance with law and in accordance with the
     observations made by it. It is this decision which is challenged in this
     appeal.
                                                                                    B
            8. While narrating the facts we have referred to the alleged
     application made by the respondents or on their behalf on April 25,
      1977 and February 15, 1978. Since the respondents do not contend that
     their alleged application of April 25, 1977 was an application for con-
     version of the user of the land, it is not necessary for us to deal with the
     same. However, since it is contended vehemently on their behalf that
     the application of February 15, 1978 was a proper application for              c
     conversion of the user of the land and the High Court has also
     accepted it as such, it is necessary to ·deal with the same. The contents
     of the said application have been reproducted above. In the first inst-
     ance, .this application was sent by the late Hans Raj Gupta for himself
     and for "Dev Raj Gupta and others". The late Hans Raj Gupta did                D
     not sign it for Dev Raj Gupta and others as the holder of the power of
     attorney from them. Nor did he make clear who "the said others
     were". The lessees of the property at that time were Dev Raj Gupta.

-    Prem Raj Gupta and Pradeep Kumar Gupta in addition to the late
     Hans Raj Gupta. Neither the said letter was signed by Dev Raj Gupta,
     Prem Raj Gupta and Pradeep Kumar Gupta nor was it stated any-                  E
     where in the letter that they had authorised the late Hans Raj Gupta to
     seek permission on their behalf. As far as the contents of !ht letter are
     concerned, they are self-explanatory. All that the late Hans Raj Gupta
     wanted to know from the Land and Development Officer were the
     terms and conditions for the construction of a commercial building on
     the land and the charges that would have to be paid for the same. This         F
     can hardly be called an application for permission to construct a com-
     mercial building on the land. It is no more than an enquiry. We are,
     therefore, unable to appreciate the contention that this letter consti-
     tuted an application for permission to use the land for commercial
     purposes. It is for this reason that we are unable to agree with the High
     Court's finding that this letter was an application for the conversion of      G
     t.he..user of the land. It is immaterial in this connection whether any
     regular form of application was prepared and was available for use at
     the relevant time. Even assuming that such a form was prescribed for
     .the first time on June 15, 1978, the letter of February 15., 1978 could
      hardly be described as an application signed by the lessees, meani~
     thereby, ·.all the lessees for permission to convert the user of the land.     H
                                                                                •
    310         SUPREME COURT REPORTS                [1990] Supp. 2 S.C.R.

    The absence of a prescribed form does not made the letter the required
A
    apphcation. The least that is expected in an application for the purpose
    is a request by all the lesseess to permit the change of the user of the
    land showing readiness and willingness to abide by the terms and con-
    ditions for such conversion of the user. The letter in question,~ on the
    other hand, did nothing more than make an enquiry suggesting that the
B   application for the change of the would be made after the terms and
    conditions including the charges for the same are known. We are,
    therefore, satisfied that the letter of February 15, 1978 was not an
    application made for the change of the user of the land.

        9. It is for this very reason that we a<e of the view that it was for
  the first time on February 27, 1981 that a proper application was made
c for the purpose. As has been pointed out hereinabove, after the letter
  of February 15, 1978 addressed by the late Hans Raj Gupta and others
  to the authority, we have on record only the letter of March 1, 1980
  addressed by the authority to Hans Raj Gupta and others pointing out
  that applications in respect of the land were received by him from
D different persons some of whom were not even co-lessees, to intimate
  conversion charges for the construction of "multi-storeyed commercial
  building''. The letter also referred to their intention to sell the pro-
  perty to MJs. Central Investment Private Limited and the United
  Towers India Private Limited". The authority also referred to the
  rejection of the same by the competent authority under the Urban
E Land (Ceiling and Regulation) Act, 1976 stated that the same had
                                                                                -
  created some doubts about the ownership of the land. It was, there-
  fore, necessary according to the authority that a fresh application for
  the permission to construct the multi-storeyed building " duly signed
  by all the co-lessees" in the prescribed form should be sent. It is
  obvious from this letter that there was some correspondence between
F the parties between February 15, 1978 and March 1, 1980 which has
  not come on record. The letter of March 1, 1980 is obviously not a
  reply sent by the authority to the late Hans Raj Gupta's letter of
  February \5, 1978, for the latter does not refer to the construction of a
  multi-storeyed building or the intended sale of the property to a third
  party. The letter is also addressed not to the late Hans Raj Gupta and
G Dev Rai Gupta and others, but to the late Hans Raj Gupta, Dev Raj
  Gupta, Prem Raj Gupta and Pradeep Kumar Gupta. It is also clear
  from the authority's letter that different persons were seeking permis-
  sion for change of the user of the land and some of them were not even
   the co-lessees of the land. The situation which obtained till March 1,
   1980 was, therefore, that there was no firm application by the au-
H thorised person or persons for conversion of the user of the land and it
                  U.0.1. v. D.R. GUPTA lSAWANT, l.]                  311

is for this reason that the authority had asked the lessees to send the
                                                                            A
application in the prescribed form duly signed by all the co-lessees.
There was no reply to this letter of March 1, 1980 and hence a remin-
der was sent by the atlthority on June 3, 1980 warning the lessees that
in case no reply was received from them within 15 days, the matter
would be treated as closed. It is pursuant to this reminder that on
February 27, 1981 a letter accompanied by an application in the pre-        B
scribed form was sent, and both the letter as well as the prescribed
form were duly signed for the first time_ by all the co-lessees. The
contents of the accompanying letter make_it clear that even the lessees
treated this application as the first duly-made application for the
purpose. It may also be mentioned here that, as has been stated in the
application, the plans for the construction of the commercial building
were sanctioned only on January 21, 1981 and the exemption applica-         c
tion made to the competent authority under Section 20 ( 1) of the Act
was even then still under process. It is in response to this application
that the sanction was given by the authority on January 12, 1984 to
convert the user of the land. We are, in the circumstances, of the view
that it was only on February 27, 1981 that an ~pplication for the change    D
of the user of the land was made by or ori behalf of the respondent-
lessees of the land.

      10. There is no explanation given by th'e appellants as to why the
application made by the respondents of February 27, 1981 was not
replied to till January 12, 1984. Hence in the absence of anything else     E
on records, it will have to be held that the date with reference to which
conversion charges have.to be counted is 27th February, 1981.'

       The authority has calculated additional premium with reference
to May 27, 1981 on the footing that the outer limit for granting permis-
sion was three months from the date of the receipt of the application.      F
There is no justification for the authority to hold thus, for they are
expected to process the application as early as possible and not to wait
till the end o{ three months. Unless there are valid reasons for them to
do so or the delay is caused on account of an omission or commission
on the part of the applicants, it is not proper to take the end of the
three months as the date with reference to which the conversion             G
charges should be calculated.

      We are, however, informed that in the present case it makes no
difference whether the charges are calculated with reference to 27th
February 1981 or May 27, 198 I. Hence, the difference in dates in
immaterial for our purpose.                                                 H
    312         SUPREME COURT REPORTS                 [1990] Supp. 2 S.C.R.

           11. The High Court is further not right in holding that there was
A   an automatic or a statutory conversion of the user of the land because
    in the Master. Plan the land in question fell in the area reserved for
    commercial use. The High Court failed to appreciate that the charge of user
    of the land permitted by the Plan was only enabling in nature. It lifted
    the restriction which was otherwise there for using the land for com·
B   mercial purpose. The land has to be used as per the agreement bet-
    ween the contracting parties, and no change of the user can be made
    contrary to the agreement even if the Plan permits such user. The Plan
    helps the parties to change the user, if the parties mutually agree to do
    so. It does not permit the occupant to change the user unilaterally. It is
    not, therefore, correct to say that no permission of the landlord was
    reeded to change the user of the land.
c
            12. In the view we have taken, we direct that the additional
    premium should be calculated by the appellants on the basis of the rate
    which was prevalent as on February 27, 1981 which is the date of the
    application made for the change of the user. The interest should be
D   charged on such additional premium w .e.f. 12th April. 1984 since a
    period of three months fro'm the date of notice, viz., January 12, 1984
    was available to the respondent-lessees to .make the payment of the
    additional premium. Taking into consideration the facts and circums·
    lances of the present case, the appellants should be given the facility to
    make the payment in three equal annual instalments and the interest
E   should be charged on such deferred payment at not more than 14 per
    cent per annum. The respondent-lessees would, however, not be
    entitled to convert the present user of the land into the commercial
    user until and unless the last of the amount of the additional premium
    together with the interest thereon is paid.

F         The respondents will further be liable to pay the misuse charges
    mentioned at items 6 and 7 of the·notice of 12.1.1984 till 12th April,
    1984 from which date, they would be paying the conversion charges as
    above.

         The appellants will _give the respondents the facility to pay the
G   rest of the amounts, i.e.,. the amounts other than the conversion
    charges in twenty four monthly instalments with interest at no moro
    than 10 per cent annum.

         13. The decision of the High Court is set aside and the appeal is
    allowed accordingly with no order as to costs.
H
    G.N.                                                     Appeal allowed.