In a significant ruling on the scope of the Supreme Court-appointed Monitoring Committee, the Delhi High Court dismissed New Delhi Municipal Council’s (NDMC) petition and directed de-sealing of an institutional property at Bhai Veer Singh Marg, Gole Market, holding that the Committee’s jurisdiction was confined to misuse of residential premises for commercial purposes and could not extend to institutional areas. The Court held that the Monitoring Committee’s jurisdiction, as defined by the Supreme Court in MC Mehta v. Union of India [[2020 SCC OnLine SC 648] and reiterated in the order dated 14th August, 2020, was strictly limited to checking misuse of residential properties for commercial purposes and did not extend to institutional premises.
Since the subject property was admittedly located in an institutional area, the direction to seal it was non est in law. The Court further held that the sealing was carried out without any notice, violating principles of natural justice, and that the penalty under Chapter 15 of MPD, 2021 was unsustainable as institutional premises fell outside the scope of the Mixed Use Regulations.
A Single Judge Bench of Justice Amit Bansal first addressed the issue of jurisdiction of the Principal District and Sessions Judge to entertain the appeal filed by the respondent trust, noting that this issue was never raised by NDMC before the lower court and was being raised for the first time in the writ petition. The Court observed that the Supreme Court vide its order dated 30th April, 2013 in MC Mehta v. Union of India [2020 SCC OnLine SC 648] had directed that all pending applications, including those filed by the respondent trust, be treated as appeals under Section 254 of the NDMC Act, and that the Registry would transmit these applications to the respective Tribunals.
Pursuant to these directions, the applications filed by the respondent trust were transferred to the ATMCD and treated as appeals under Section 254 of the NDMC Act. Since Section 256 of the NDMC Act provides for an appeal against the order of the Appellate Tribunal before the Principal District and Sessions Judge, the Court held that the appeal was maintainable and the impugned order was not without jurisdiction.
On the merits, the Court observed from the letter dated 3rd June, 2009 sent by NDMC to L&DO that the action was premised on violation of terms and conditions of the lease deed (MoA), and not on MPD, 2021. The file noting of NDMC itself recorded that the respondent trust had violated paragraph XXIV of the MoA by subleasing a part of the premises. Since the respondent trust had admittedly paid the entire misuse charges of Rs. 24.47 lakhs levied by L&DO for violation of the MoA, the Court observed that NDMC was not competent to take any action against the respondent trust for violation of the terms and conditions of the MoA.
The Court further observed that the Monitoring Committee was appointed by the Supreme Court vide order dated 24th March, 2006 to implement its decision dated 16th February, 2006 in MC Mehta v. Union of India, which was in the context of misuse of residential premises for commercial use. This decision was later extended to NDMC areas vide order dated 7th May, 2013. The Supreme Court in its order dated 14th August, 2020 had reiterated that the Monitoring Committee was appointed only to check the misuse of residential properties for commercial purposes, and that it was never authorised to take action against residential premises not being used for commercial purposes. The Court noted that the subject property was located in an “institutional area” and not in a residential area, as evident from the MoA and the address of the property.
The Court also observed that no notice was ever issued to the respondent trust for violation of Section 250 of the NDMC Act, and the public notice dated 29th May, 2007 issued in leading newspapers was in the context of misuse of residential property for commercial purposes and not for institutional premises. Regarding the penalty imposed under Chapter 15 of MPD, 2021, the Court noted that Chapter 15 is titled “Mixed Use Regulations” and Clause 15.1.i defines mixed use as “non-residential activity in residential premises,” with no reference to institutional premises.
The Court observed that properties located in institutional areas were clearly outside the scope and ambit of Chapter 15 of MPD, 2021. Furthermore, Clause 15.9(vi) provided for regularization by payment of one-time registration and conversion charges without penalty on or before 30th June, 2009, but the property was sealed on 13th January, 2009, much before this deadline.
Briefly, New Delhi Municipal Council (‘NDMC’) filed a petition challenging the judgment passed by the Principal District and Sessions Judge, New Delhi, which had set aside the order passed by the Appellate Tribunal, MCD (‘ATMCD’). The impugned judgment had held that the Monitoring Committee appointed by the Supreme Court was not empowered to inspect premises meant for institutional purposes and therefore, its direction to NDMC to seal Plot bearing no. 31, Bhai Veer Singh Marg, Gole Market, New Delhi, ad measuring 299.937 sq. mtrs. (‘subject property’) was non est in law.
The subject property was originally allotted to Quami Ekta Trust (‘respondent trust’) on 3rd November, 1988 for construction of their institutional building, and possession was handed over on 28th January, 1992. A Memorandum of Agreement (‘MoA’) was executed on 12th March, 1992 between the President of India through the Land and Development Office (‘L&DO’), Ministry of Urban Development, and the respondent trust. The sanctioned building plan was approved on 25th January, 1998, and the completion certificate was issued on 26th February, 1998 for construction of basement, ground floor, first floor, second floor and third floor.
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On 15th June, 2002, L&DO discovered that the respondent trust had sublet the first floor, second floor and third floor of the subject property, and accordingly issued notices alleging breach. Subsequently, on 13th January, 2009, the entire building was sealed by NDMC at the behest of the Monitoring Committee on the ground that the building was being put to use contrary to the sanctioned use. The ground floor was de-sealed on 28th February, 2009 under orders of the Monitoring Committee as it was being used for permissible activities. On 26th August, 2009, L&DO demand a sum of Rs. 24.47 lakhs as penalty/misuse charges, which was paid by the respondent trust on 28th August, 2009.
The respondent trust challenged the sealing action before the ATMCD, which vide order dated 28th February, 2020 dismissed the appeal, holding that the respondent trust had committed misuse by using the property for commercial purposes in violation of the MPD, 2021, and was liable to pay ten times penalty as per paragraph 15.9(v) of the MPD, 2021. The respondent trust then filed an appeal under Section 256 of the NDMC Act before the Principal District and Sessions Judge, which was allowed by the impugned order, holding that the Monitoring Committee was not empowered to inspect institutional premises, that the sealing was carried out without issuance of any notice, and that once the respondent trust had paid the misuse charges to L&DO, NDMC had no power to keep the property sealed.
