Municipal Corp. Jodhpur Vs Rajendra Bhandari 2000

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Page 1 Wednesday, July 26, 2023

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2000 SCC OnLine Raj 58 : (2000) 3 RLW 1611 : AIR 2001 Raj 9 : (2000) 2 RLR
644 : (2001) 4 WLC 647
In the High Court of Rajasthan at Jaipur

(BEFORE N.N. MATHUR AND AMARESH KU. SINGH, JJ.)
Municipal Corporation, Jodhpur & Anr.

Versus
Rajendra Bhandari & Anr.
D.B. Civil Special Appeal No. 592 of 1999
Decided on May 22, 2000
Rajasthan Municipalities Act, 1959, Sec. 173-A, Transfer of Property act, Sec. 8, 10 & 55
— Demanded conversion charges u/Sec. 173-A of the Act of 1959 in respect of the land
which was neither allotted nor sold by the Municipality or the State Government — Held —
The provisions of Sec. 173-A must be read with the provisions contained in Sec. 8 and 55
(6)(a) of the Transfer of Property Act — Land was purchased from private person — All
rights of the former owner have been transferred to the purchaser and he is entitled to all
the rights referred to in Secs. 8 and 55(6)(a) of the T.P. Act — Unless the rights are
acquired by the State Government or the Municipality, the purchaser cannot be deprived of
its rights — Conversion charges cannot be demanded u/Sec. 173-A of the Act of 1959.
(Paras 18 & 19)
Appeal dismissed with costs.
The provisions of Section 173-A of the Rajasthan Municipalities Act must be read with the
provisions contained in Section 8 and Section 55(6)(a) of the Transfer of Property Act. Where a
person has purchased the plot of land from private citizen who was the owner of the land and by
such purchase of land all the rights of the former owner have been transferred to the purchaser, the
provisions of Sections 8 and 55(6)(a) of the Transfer of Property Act would apply and the purchaser
would be entitled to all the rights referred in Sections 8 and 55(6)(a) of the Transfer of Property Act.
Unless the rights, in the immovable property, are acquired by the State Government or by the
Municipality, as the case may be, the purchaser cannot be deprived of the rights which are available
to him under Section 8 and Section 55(6)(a) of the Transfer of Property Act. Section 173-A of the
Rajasthan Municipalities Act cannot be interpreted in such a manner as to deprive the owners of
immovable properties situated within municipal area of the rights which are available to them under
Section 8 and Section 55(6)(a) of the Transfer of Property Act. Even in the case of land sold or
allotted by the State Government or the Municipality, the provisions of Section 8 and Section 55(6)
(a) of the Transfer of Property Act are applicable and, therefore, if the sale or allotment of land by
the Municipality or the State Government was without any condition, restraining the purchaser from
using the land for a specified purpose only, no question of demanding any conversion charges under
Section 173-A of the Rajasthan Municipalities Act would arise if the purchaser wants to change the
use of the land.
(Para 19)
Case Law Referred:
1. Hot Chand v. Municipal Council, Ajmer (WLC (Raj.) 1996 (1) 300).—Relied on.
Dinesh Maheshwari, for Appellants
M.R. Singhvi, for Respondents
The Judgment of the Court was delivered by
AMARESH KU. SINGH, J.:— Heard the learned counsel for the appellants and the
respondents.
2. This appeal is directed against the order dated 4.3.1999 passed by the learned
Single Judge in S.B. Civil Writ Petition No. 2918/97. By the aforesaid order, the writ
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petition filed by the respondent No. 1 Rajendra Kumar was allowed and the appellants
as well as respondent No. 2 were directed not to insist for payment of conversion
charges under Section 173-A of the Rajasthan Municipalities Act.
3. The only question which arises for decision is whether the State Government, can
demand any conversion charges under Section 173-A of the Rajasthan Municipalities
Act in respect of a land, which was neither allotted nor sold by the Municipality or the
State Government. The respondent No. 1(petitioner), owned shops which are
construced on land measuring 3199 sq. ft. in area. He submitted an application before
the Municipal Corporation, Jodhpur and the permission was granted to him by the
Commissioner vide letter dated 10.10.1979 (Annexure 1). Thereafter the petitioner
moved another application seeking permission to raise construction and permission
was granted to him vide order dated 5.1.1988 (Annexure 2). After obtaining the
permission vide Annexure 2, the petitioner raised construction on the land belonging
to him. After some time, he wanted to make further alterations and, therefore, he
moved another application on 29.12.1995 seeking permission to raise construction. On
submission of this application, he was required to submit some documents which were
submitted by him but permission was not granted. He, therefore, served a notice on
the Municipal Corporation through his counsel on 22.7.1996. After the service of
notice, the petitioner was informed that a technical report was being called and, after
submission of the technical report, the matter would be placed before the Building
Committee for consideration and after the submission of the technical report, the
Building Committee, considered the application of the petitioner and, by resolution No.
15, granted permission. The Commissioner, in view of the decision of the Building
Committee, accorded his approval on 14.2.1997 but added a condition that
commercial charges be realised. The letter dated 14.2.1997 demanding commercial
charges was sent to the petitioner. The petitioner was also served with notice dated
18.6.1997 asking him to deposit the conversion charges within a period of 7 days. The
amount of conversion charges demanded from the petitioner was Rs. 11,00,011.90.
The land on which the petitioner had constructed shops in which he wanted to make
alterations was neither sold nor allotted by the State Government or the Municipality
to him or to his ancestors. According to the averment made in the petition, the land on
which the shops were constructed forms part of the ancestral property situated in Moti
Chowk, Jodhpur. A dispute regarding the title and possession over that land arose and
a regular suit No. 11/1962 was filed which was dismissed by the trial court but by
judgment and decree dated 9.3.1973, passed in D.B. Civil Regular First Appeal No.
30/67, the suit was decreed in accordance with the decree passed by the High Court
and the property was delivered to the petitioner's ancestors and blue print had been
prepared at the time of deliversy of possession. In para No. 3, it is also mentioned that
the State had filed an appeal against the decree but that appeal had been dismissed.
Thus, the petitioner's case was that the land was his ancestral property which came
into possession of his ancestors in accordance with the decree passed by the High
Court. It is also stated in the writ petition that Shri Oswal Singh Sabha had instituted
a regular civil suit against Shri Sire Chand Bhandari, Manak Chand, Rajendra Bhandari
and Raj Kumar Bhandari and that suit was ultimately disposed of by compromise and
in accordance with the compromise, the petitioner got two pieces of land measuring
62′ × 62′ and 53′ × 56′, total area 3199 sq. ft. It is also stated in the writ petition
that when this land came into possession of the petitioner, shops were already
standing on them.
4. Feeling aggrieved by the demand of conversion charges, petitioner (respondent
No. 1 filed the writ petition. The reply was filed on behalf of the respondents. The
averments made in para Nos. 2 and 3 of the writ petition have been admitted in the
reply filed by the respondents. It is thus, not disputed that the land on which the
shops of the petitioner have been built, was neither sold nor allotted by the State
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Government or the Municipality but was the ancestral property which came to the
possession of the petitioner in pursuance to the decree passed by the High Court and
the compromise decree passed in the civil suit filed by Oswal Singh Sabha. In order to
bring the land belonging to the petitioner within the purview of Section 173-A of the
Rajasthan Municipalities Act, in para No. 35 of the reply, the respondents pleaded:
“In the present case also the source of the land in possession of the petitioner
must be by the government of the day which has merged into State of Rajasthan
and it will be taken that at that time also the land was allotted and it remained in
possession of the person and ultimately when the land came into the ownership of
the present petitioner and he is contemplating to raise the commercial complex
then under the Act of 1959 he is duty bound to make the payment of conversion
charges as per the notification dated 16.12.1991 issued under Section 297 of the
Act of 1959.”
5. When the arguments were addressed before the learned Single Judge, the
petitioner's counsel confined his arguments to the challenge to demand raised by the
Municipal Corporation wherein the Municipal Board demanded conversion charges in
the shape of commercial charges. The learned Single Judge held that the land was
neither sold nor allotted to the petitioner by the Municipal Corporation or the State
Government on any condition and, therefore, the provisions of Section 173-A of the
Rajasthan Municipality Act, 1959 did not apply and no conversion charges would be
demanded by the Municipal Corporation, Jodhpur. Consequently, the writ petition was
allowed and the respondents were restrained from asking for deposit of any amount of
conversion charges under Section 173-A of the Rajasthan Municipalities Act.
6. The learned counsel for the appellants has submitted that the view taken by the
learned Single Judge is not correct and that the provisions of Section 173-A of the
Rajasthan Municipalities Act, 1959, apply to all lands, use thereof is sought to be
changed by the owners irrespective of the fact whether the land had been allotted or
sold to them by the State Government or the Municipality or they had purchased the
land from any private person. It is further submitted by the learned counsel for the
appellants that the notification No. F. 16 (46) Stha. Ni./91/4220044411 dated
16.12.1991 (Annexure 10) expressly empowers the Municipal Board and the Municipal
Corporation to demand conversion charges from those persons who have converted the
residential land into commercial land and no distinction has been made in the
notification between the land sold or allotted by the State Government or the
Municipality and the lands which have not been allotted or sold by the Municipality or
the State Government.
7. The learned counsel for respondent No. 1 has supported that the impugned order
passed by the learned Single Judge.
8. We have carefully considered the submissions made by the learned counsel for
the parties. We have carefully read the notification dated 16.12.1991 on which reliance
has been placed by the learned counsel for the appellants. A bare perusal of this
notification shows that several Municipal Boards/Municipal Corporation sought
guidance from the State Government as to the manner in which the land which had
been converted for commercial purposes should be regularised and, as an interim
measure, by this notification guidance was given by the State Government and it was
ordered that conversion charges should be calculated at the rate of 20% of the
difference between market value of the residential land and the market value of
commercial land and if any person intends to pay conversion charges in installment
then the conversion charges should be calculated at the rate of 25% and interest at
the rate of 15% should be taken from him. The notification, on the face of it is
confined to cases in which the use of land from residental to commercial was
converted unlawfully. This notification, therefore, has no applicable to the cases in
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which the use of the land was changed in an lawful manner. Besides, no notification
can be issued contrary to the provisions of the Rajasthan Municipality Act, 1959.
Therefore, the notification dated 16.12.1991, cannot go beyond the scope of Section
173-A of the Rajasthan Municipalities Act so far as the right of the owner of a land to
change its use from residential to commercial or commercial to residental purpose is
concerned. We deem it fit to clarify that so far as change in use of land is concerned,
the Municipality have two rights: (1) the right to grant permission for change in use of
land, if the land had been sold or allotted by the State Government or the Municipality
for a specific purpose only and (2) the right to grant permission to construct plot in
accordance with the plan approved by the Municipality. The former right is an incident
of the property rights vested in the State Government or the Municipality and,
therefore, this right can be availed of by the Municipality only in those cases where
land had been allotted or sold by the State Government or the Municipality for a
specific purpose only. The second right, namely, the right to insist that no construction
shall be made except according to plan of construction approved by the Municipality, is
not an incident of the property rights vested in the Municipality, it is an incident of the
police power of the State delegated to the Municipality to exercise control on the right
of the land in the matter of construction of building on the land belonging to them.
The object behind the exercise of this power can only be to regulate the construction
of plot in such a manner as to ensure that the development of land is in accordance
with the approved land and is not injurious to any one. The object behind the use of
police power is only to regulate the use and enjoyment of property rather than to
deprive any persons of his right to property in any manner. If the exercise of the
power to regulate construction of building is exercised in unreasonable manner, it
would be open to challenge on the ground that it is unreasonable and interferes with
the fundamental rights of the citizens. The police power of the State must be exercised
in conformity with the fundamental rights as well as right to property conferred by
Article 300A of the Constitution. In our opinion, it would be fallacious to assume, that
the power to insist of construction according to the plan approved by the Municipality,
includes the power to deprive any person of his right in the property.
9. we now propose to consider the provisions of Section 173-A of the Rajasthan
Municipality Act, in detail.
10. Section 173-A of the Rajasthan Municipalities Act reads:
“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 Municipality or the State Government subject to the
condition of restraining the 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 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 realised shall be credited 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 of the person liable in
the land the use of which has been changed and shall be recoverable as arrears of
land revenue.”
11. A bare reading of Section 173-A shows that for the application of this section,
two conditions are necessary; (1) that the land has been allotted or sold to any person
by the Municipality or the State Government and (2) that the allotment or sale of land
by the Municipality or the State Government was subject to the condition of
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restraining its use for a particular purpose. If either of these two conditions is not
fulfilled, the provisions of Section 173-A will not apply. In other words, the provisions
of Section 173-A have no application to the land which had been obtained by a person
otherwise than by allotment or sale by the State Government or the Municipality and
in case of land allotted or sold by the Municipality or the State Government, the power
to demand conversion charges would be exercisable only in those cases in which the
land was allotted or sold subject to the condition that the land would be used for a
specific purpose only.
12. The provisions of Section 173-A of the Rajasthan Municipalities Act were
considered by this Court in several cases. In Hot Chand v. Municipal Council, Ajmer
(1), a learned Single Judge of this Court held:—
“A careful reading of this Section shows that the provisions will apply only with
regard to that property which has been allotted or sold to any person by a
Municipality or the State Government and unless these ingredients are attracted,
the provision of Section 173-A will not apply.”
13. In D.B. Civil Special Appeal (Defect) No. 2295/98, decided on 1.2.1998, the
Division Bench considered the provisions of Section 173-A of the Rajasthan
Municipalities Act and observed:—
“The learned Single Judge has observed that under Section 173-A, the
Government could not claim conversion charges. We also find that it is an ‘abadi’
land allowed to be converted from agricultural to ‘abadi’. When no restrictions are
put on how the ‘abadi’ land will be used and to what purpose it can be put, it will
not be a case covered by Section 173-A of the Rajasthan Municipalities Act as it
applies in cases where a land has been allotted subject to the condition of
restraining its use for a particular purpose.”
14. There is yet another reason for the conclusion that the provisions of Section 173
-A of the Rajasthan Municipalities Act do not apply to lands which have not been
allotted or sold by the State Government or the Municipalities and to lands which are
allotted or sold by the State Government or the Municipalities without imposing any
condition restraining its use for a specific purpose.
15. The transfer of property is governed by the Transfer of Property Act and Section
8 of the Transfer of Property Act reads;
“8. Operation of transfer.-Unless a different intention is expressed or necessarily
implied, a transfer of property passes forthwith to the transferee all the interest
which the transferor is then capable of passing in the property and in the legal
incidents thereof.
Such incidents include, where the property is land, the easements annexed
thereto, the rents and profits thereof accruing after the transfer, and all things
attached to the earth; and, where the property is machinary attached to the earth
the movable parts thereof; and, where the property is a house, the easements
annexed thereto the rent thereof accruing after the transfer, and the locks, keys,
bars, doors, windows and all other things provided for permanent use therewith;
and, where the property is a debt or other actionable claim, the securities therefore
(except where they are also for other debts or claims not transferred to the
transferee), but not arrears of interest accrued before the transfer; and, where the
property is money or other property yielding income, the interest or income thereof
accruing after the transfer takes effect.”
16. Section 10 of the Transfer of Property Act reads:
“10. Condition restraining alienation.-Where property is transferred subject to a
condition or limitation absolutely restraining the transferee or any person claiming
under him from parting with or disposing of his interest in the property, the
condition or limitation is void except in the case of a lease where the condition is for
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the benefit of the lessor or those claiming under him; Provided that property may
be transferred to or for the benefit of a woman (not being a Hindu, Muhammadan or
Buddhist), so that she shall not have power during her marriage to transfer or
change the same for her beneficial interest therein.”
17. Section 55 of the Transfer of Property Act deals with rights and liabilities of
buyer and seller. Section 55(6)(a) reads:—
“55(6)(a)-The buyer is entitled-
(a) where the ownership of the property has passed to him, to the benefit of any
improvement in, or increase in value of, the property, and to the rents and
profits thereof.”
18. A bare reading of Section 8 of the Transfer of Property Act shows that unless a
different intention is expressed or necessarily implied, a transfer of property passes
forthwith to the transferee all the interest which the transferor is then capable of being
passed in the property and in the legal incidents thereof and Section 55(6)(a), shows
that where the ownership of the property has passed to a buyer, he is entitled to the
benefit of improvement in or increase in value of, the property and to the rents and
profits thereof.
19. The provisions of Section 173-A of the Rajasthan Municipalities Act must be
read with the provisions contained in Section 8 and Section 55(6)(a) of the Transfer of
Property Act. Where a person has purchased the plot of land from private citizen who
was the owner of the land and by such purchase of land all the rights of the former
owner have been transferred to the purchaser, the provisions of Sections 8 and 55(6)
(a) of the Transfer of Property Act would apply and the purchaser would be entitled to
all the rights referred in Sections 8 and 55(6)(a) of the Transfer of Property Act. Unless
the rights, in the immovable property, are acquired by the State Government or by the
Municipality, as the case may be, the purchaser cannot be deprived of the rights which
are available to him under Section 8 and Section 55(6)(a) of the Transfer of Property
Act. The submission of the learned counsel for the appellants that the provisions of
Section 173-A of the Rajasthan Municipalities Act apply to all lands situated within the
municipal limits irrespective of the fact whether the land was sold or allotted by the
State Government or the Municipality or it was transferred by sale or gift by a private
citizen or was inherited in accordance with the law of succession, cannot be accepted
in view of the Articles 300-A of the Constitution. Section 173-A of the Rajasthan
Municipalities Act cannot be interpreted in such a manner as to deprive the owners of
immovable properties situated within municipal area of the rights which are available
to them under Section 8 and Section 55(6)(a) of the Transfer of Property Act. Even in
the case of land sold or allotted by the State Government or the Municipality, the
provisions of Section 8 and Section 55(6)(a) of the Transfer of Property Act are
applicable and, therefore, if the sale or allotment of land by the Municipality or the
State Government was without any condition, restraining the purchaser from using the
land for a specified purpose only, no question of demanding any conversion charges
under Section 173-A of the Rajasthan Municipalities Act would arise if the purchaser
wants to change the use of the land.
20. For the reasons mentioned, there is no merit in this appeal. It deserves to be
dismissed and is hereby dismissed with costs.
———
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SCC Online Web Edition, © 2023 EBC Publishing Pvt. Ltd.

Page 1 Wednesday, July 26, 2023

In the High Court of Rajasthan at Jaipur

Municipal Corporation, Jodhpur & Anr.

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