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REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.6030 OF 2019 (arising out of SLP(C)No.7710 of 2019)

THE MAYOR JAIPUR MUNICIPAL CORPORATION & ANR.      … APPELLANT(S)

VERSUS

THAKUR SHIV RAJ SINGH & ORS.     … RESPONDENT(S)

J U D G M E N T

ASHOK BHUSHAN, J.

The Jaipur Municipal Corporation has filed this

appeal  challenging  the  Division  Bench  judgment  of

Rajasthan  High  Court,  Bench  at  Jaipur  dated

12.01.2018 by which the Special Appeal filed by the

respondents  questioning  the  judgment  of  learned

Single Judge has been allowed and the appellants have

been  directed  to  refund  the  conversion  charges

deposited by the respondents along with six percent

interest.  

2. Brief facts of case giving rise to this appeal

are:

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Lt. Col. Late Harnath Singh, the predecessor-in-

interest of the respondents by registered sale deed

dated  16.04.1959  had  purchased  the  property  in

question known as ‘Lal Niwas’ from His Highness Sawai

Man Singh of Jaipur. Lt.Col. Late Harnath Singh died

on  08.01.1997  after  which  the  respondents  became

owner of the property. The respondents, with intent

to develop by constructing a multi-storeyed building,

commercial-cum-residential  complex  in  the  area  of

8080.14  square  meter,  made  an  application  to

Corporation for conversion of land use as condition

precedent  for  sanction  of  building  plan  for

constructing commercial-cum-residential complex. The

Corporation  issued  an  order  dated  22.02.2003

directing  the  respondents  to  deposit  an  amount  of

Rs.1,01,04,672/- towards the conversion charges. The

respondents  reserving  their  rights  deposited  the

amount through pay order dated 20.03.2003. An order

dated  06.05.2003  was  passed  by  the  Corporation

allowing  the  conversion  of  the  land  use  of  the

aforesaid  land.  The  building  plan  was  thereafter

approved  by  the  Corporation  on  08.01.2004.  The

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respondents  issued  notice  dated  28.04.2004  to  the

Corporation calling upon the appellants to pay a sum

of  Rs.1,13,86,703/-  along  with  interest.  The

respondents filed a Writ Petition No.4783 of 2004 in

the High Court of Rajasthan at Jaipur Bench praying

for following reliefs:

“(i) By  an  appropriate  writ,  order  and direction  impugned  orders  dated 22.02.2003 (Annexure.2), order dated 01.04.1003 (Annexure.4), 19.11.2003 & 20.12.2003 (Annexure.7) passed by the respondents No.2 & 3 may kindly be quashed and set aside.

(ii) By  an  appropriate  writ,  order  or direction  the  respondents  may  be directed  to  refund  the  amount  of Rupees  1,01,04,672/-  charged/ extracted by the respondents towards conversion  charges  of  the  land  in question  and  an  amount  of  Rupees 6,31,542/-  and  Rupees  6,59,961/- charged by the respondents towards Shahari  Jama  Bandi  &  interest thereon,  thus  totalling  Rs. 1,13,96,175/-  from the petitioners along  with  interest  @  18%  p.a. thereon as damages for unnecessarily withholding  the  aforesaid  amount w.e.f. date of deposit to the date of  payment.  The  respondents  may further  be  directed  to  refund  the total amount as prayed hereinabove to the petitioners in the proportion viz. 30% to Thakur Shiv Raj Singh (Petitioner No.1) and 1/3rd of the remaining to each of the Petitioners No.2 to 4.

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(iii) Cost of litigation be awarded to the petitioners.

(iv) Any other order(s) as this Hon’ble High Court may deem fit and proper in  the  facts  and  circumstances  of the  present  writ  petition  be  also passed  in  favour  of  the  humble petitioners  and  against  the respondents.”

3. In the writ petition, the Corporation filed its

reply. The Corporation resisted the writ petition. A

learned  Single  Judge  of  the  High  Court  vide  its

judgment  dated  04.07.2006  dismissed  the  writ

petition. Aggrieved against the judgment of learned

Single  Judge,  Special  Appeal  was  filed  by  the

respondent  before  the  Division  Bench.  The  Division

Bench of the High Court vide its impugned judgment

dated  12.01.2018  allowed  the  Special  Appeal  and

directed for refund of the amount of Rs.1,01,04,672/-

with  interest.  The  Corporation  aggrieved  by  the

judgment of the Division Bench has come up in this

appeal.

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4. We have heard learned counsel for the appellants

as  well  as  learned  counsel  appearing  for  the

respondents.  

5. Learned counsel for the appellants submits that

it  is  the  respondents  who  had  submitted  an

application for paying conversion charges to enable

sanction  of  building  plan  of  commercial-cum-

residential complex in the premises in question. The

Corporation  had  directed  for  deposit  of  conversion

charges which were deposited by the respondents. The

respondents  are  not  entitled  to  claim  any  refund.

They  have  themselves  deposited  the  conversion

charges. It is submitted that in view of the land use

of plot in the Master Plan, which was in force at the

time  when  the  application  was  moved  by  the

respondents, i.e., ‘residential’, it was obligatory

for the respondents to seek permission for using the

land for commercial purpose as required by Section

173-A  of  Rajasthan  Municipalities  Act,  1959  as

amended by Act 19 of 1999. It is submitted that the

respondents’ map for sanction of building plan for

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commercial-cum-residential plot could not have been

sanctioned  unless  the  conversion  of  land  use  was

permitted and the amount demanded by the Corporation

from respondents was the amount of conversion charges

of land use. It is submitted that the Division Bench

without  considering  the  relevant  issues  and

provisions of Section 173-A allowed the appeal. The

Division Bench erred in directing for refund of the

amount deposited by the respondents.

6. Learned counsel for the respondents refuting the

submissions of the learned counsel for the appellants

contends that the respondents were forced to deposit

the  amount  of  Rs.1,01,04,672/-  by  the  Corporation.

The respondents deposited the amount under protest.

It  is  submitted  that  from  the  date  property  was

purchased in the year 1959, the property is being

used for commercial purposes. It is submitted that a

Company M/s. Hindustan Salts Limited was using the

premises for commercial purpose till M/s. Hindustan

Salts Limited handed over the premises in the year

1996  to  Lt.  Col.  Late  Harnath  Singh.  When  the

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premises was being used for commercial purpose since

before the date when building plan for constructing

commercial-cum-residential  complex  was  made,  there

was  no  occasion  for  payment  of  any  conversion

charges. It is submitted that in Master Plan the land

use of plot in question as on date as well as at the

relevant time was commercial. It is submitted that

the respondents were not liable to pay any conversion

charges  and  the  Corporation,  having  realised  the

conversion charges illegally and arbitrary from the

respondents, is obliged to refund the amount. It is

submitted  that  the  learned  Single  Judge  also  has

returned a finding that the land in question is being

used for commercial purposes.

7. We have considered the submissions of the learned

counsel for the parties and have perused the records.

8. Before we enter into the submissions made by the

learned counsel for the appellants, it is relevant to

notice  the  relevant  provisions  of  Rajasthan

Municipalities  Act,  1959  pertaining  to  land  user.

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Section 173-A is provision dealing with the power of

the State Government to allow the change of use of

land.  Section  173-A  was  amended  by  Rajasthan

Municipalities (Amendment) Act, 1999. It is useful to

notice  the  provisions  of  Section  173-A  before  the

amendment  and  after  the  amendment  which  are  as

follows:

“Section 173-A of the Act, prior to its amendment, reads as follows:

“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 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 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  to  the Consolidated Fund of the State or to the fund of the Municipality as may

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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.”

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

“Section  173-A  -  Restriction  on change of use of land and power of the State Government to allow change of use of land.-(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 or authority in 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 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.

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(3)  Notwithstanding  anything contained in sub-section (1) or sub- section (2), the State Government or any  authority  authorised  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,  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 purpose; or

(ii) from  commercial  to  any  other purpose; or

(iii)  from  industrial  to  commercial  or any other purpose; or

(iv) from  cinema  to  commercial  or  any other purpose:

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

(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  authorised  by  it under  sub-section  (3),  within  six months from the date of commencement of  the  Rajasthan  Municipalities (Amendment)  Act,  1999  (19  of  1999) for  regularisation  on  said  use  and upon regularisation of the change of use  of  land  he  shall  deposit  the amount contemplated under sub-section (3).

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(5) Where the State Government or the authority authorised by it under sub-section (3) is satisfied that a person who 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 regularised,  it  may  proceed  to determine  the  conversion  charges after  due  notice  and  hearing  the party/parties  and  the  charges  so determined  shall  become  due  to  the municipality and be recoverable under sub-section (7).

(6)  The  conversion  charges  so realised  shall  be  credited  to  the fund of the municipality.

(7)  Charges  under  this  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.””

9. Statement of Objects and Reasons of the Amendment

Act of 1999 is also relevant to notice, which is to

the following effect:

“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 State Government may, if it is satisfied so to do in public interest, allow the owner

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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.

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 Government or any other authority authorised 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  existing  Section  173-A  of the Rajasthan Municipalities Act, 1959 is proposed to be substituted.”

10. The  demand  for  conversion  charges  having  been

raised  in  the  present  case  in  the  year  2002,  the

provisions of Section 173-A as amended by Act 19 of

1999 are applicable in the present case. A perusal of

unamended  and  amended  Section  173-A  indicates  that

there  is  substantial  change  in  the  statutory

provision  of  Rajasthan  Municipalities  Act,  1959.

Prior to amendment, the power of the State Government

to allow the change in the use of land was confined

to a land allotted or sold by Municipality or the

State Government. The amended Section 173-A has not

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only  changed  heading  of  the  Section  but  contents

also. Section 173-A as amended contains restriction

on use of land. Both sub-section (1) and sub-section

(2) of Section 173-A now contain a restriction on

both  the  categories  of  land,  i.e.,  (i)  originally

allotted  or  sold  by  the  State  Government,  any

Municipality and other local authority or any other

body or legal authority; (ii) in the case of any land

not  allotted  or  sold  and  not  covered  under  sub-

section (1). The restriction is that no person shall

use or permit the use of any such land situated in a

municipal area other than that for which such land

use was or is permissible, in accordance with the

Master Plan, wherever it is in operation. The amended

provision of Section 173-A has been brought on the

Statute  book  to  ensure  planned  development  of  a

municipal  area.  Master  Plans  are  to  be  prepared

according to the statutory Scheme keeping in view the

future  developments  of  the  city  and  the  municipal

area.  A  clear  distinction  between  the  statutory

Scheme under Section 173-A, unamended and amended, is

visible. Earlier the restriction was there only with

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regard to land, which has been allotted or sold to

any person by a Municipality or the State that too

restriction for land use for any other purpose other

than the purpose for which it was originally allotted

or  sold.  After  the  amendment  restriction  is  with

regard to the land use as provided in Master Plan.

Even if prior to amendment in Section 173-A, a person

holding the land which was neither allotted nor sold

to it by Municipality or State could have used the

land for any purpose, the restriction has now been

placed by amended Section 173-A. In the facts of the

present  case,  even  though  prior  to  amendment  of

Section 173-A the respondents were using the land for

commercial purposes that user is prohibited by virtue

of  restriction  brought  by  amended  Section  173-A(2)

for using the land for a purpose other than one which

is permitted under Master Plan, permission of State

or any authority authorised by it, is required as

provided by sub-section (3) of Section 173-A.

11. We need to notice the land use as permissible in

the  Master  Plan,  which  was  in  operation  at  the

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relevant  time  when  respondents  submitted  an

application  for  sanction  of  building  plan  for

commercial-cum-residential complex.  

12. The appellants have filed a rejoinder-affidavit

dated 26.07.2019 wherein Jaipur Development Authority

Land  Use  Plan-2011  has  been  brought  on  record  as

Annexure-R/1, which indicates that Master Development

Plan was prepared and approved, which Plan for Jaipur

Region came into force with effect from 01.09.1998.

In paragraph 6(c) of the rejoinder-affidavit, it has

been  pleaded  that  the  Master  Plan  2011  has  been

notified on 01.09.1998. It was further pleaded that

with  a  view  to  ensure  planned  and  regulated

development, the Master Plan 2011 for Jaipur Region

was  notified  in  which  the  present  area  where  the

property  in  question  is  situated  was  declared  a

‘residential’  area.  In  the  Land  Use  Plan  2011  of

Master Plan 2011 as per Annexure-R/1 Plot No.21, Lal

Niwas is mentioned as residential as submitted by the

learned counsel for the appellants.

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13. Learned counsel appearing for the respondents has

submitted that Annexure-R/1 filed by the appellants

along  with  the  rejoinder-affidavit  is  only  a  map

which cannot be read to mean that land use of Plot

No.21,  Lal  Niwas,  has  been  shown  as  residential

except  that  it  has  been  marked  as  residential  by

officials  of  the  Corporation.  It  has  further  been

pleaded  in  the  rejoinder-affidavit  that  in  Master

Plan  2025,  which  was  brought  into  force  on

01.09.2011,  the  property  in  question  has  now  been

earmarked as commercial.

14. In event, the appellants claim that land use of

Plot No.21 in the Master Plan 2011 enforced w.e.f.

01.09.1998  is  accepted  as  residential,  the

restriction as imposed by sub-section 2 of Section

173-A as amended by Act, 1999 shall come into force

and for change of land use as given in Master Plan

2011, the respondents were obliged to seek permission

under sub-section (3) of Section 173-A and without

payment of conversion charges, they could not have

obtained sanction map for commercial use of the land.

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This  Court  in  Municipal  Corporation,  Rajasthan  vs.

Sanjeev Sachdeva and others, (2013) 12 SCC 562,  had

occasion to consider Section 173-A as amended by Act

19 of 1999.  

15. In the above case also, the respondents therein

had  purchased  a  plot  of  land  with  a  house  on

09.09.2002, situated in a residential area by way of

a registered sale deed. On an application submitted

for  conversion  of  land  use  from  residential  to

commercial,  certain  amount  was  deposited  by  the

respondents.  The  respondents  filed  a  writ  petition

challenging the vires of the amended Section 173-A as

well as the demand notice. The writ petition after

some  litigation  was  allowed  by  the  learned  Single

Judge  and  demand  notice  was  quashed.  The  Division

Bench dismissed the appeal of the Corporation against

which judgment the Municipal Corporation had come to

this  Court.  This  Court  while  interpreting  Section

173-A laid down following in paragraph Nos.11, 12 and

13:

“11. A bare reading of unamended Section 173-A(1) of the Act would indicate that the

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conversion for change of land use charges could  only  be  realised  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.  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 case, (2007) 14 SCC 144, interpreting the unamended Section 173-A of the 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, we may refer to the Statement of Objects and Reasons of the  Amendment  Act,  1999,  which  reads  as under:    “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 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.

  With  a  view  to  ensure  planned  and regulated development of the urban areas it is necessary to restrict and bar the

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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  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 existing Section 173-A of the Rajasthan Municipalities Act, 1959 is proposed to be substituted.”

12.  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 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 Sections 173-A(1)(2) and (3) also  contemplate  a  situation  wherein  the State  Government  is  entitled  to  levy conversion  charges  if  the  change  in  use from  one  purpose  to  other  purpose.  The amendment was necessitated since the State Legislature  thought  the  provision  of Section  173-A  (unamended)  stood  as  an impediment  for  proper  planning  of  urban areas.  In  other  words,  with  a  view  to ensure planned and regulated development of urban  areas,  it  was  felt  that  some restrictions have to be imposed and it was for  that  purpose  that  Section  173-A  was amended.

13.  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

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were  promulgated.  It  is  under  the abovementioned  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. 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 the 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 Soni case which was dealing with the unamended provision of Section 173-A.”

16. The law laid down by this Court in the above case

is fully applicable in the facts of the present case.

The present case is also where sub-section (2) of

Section 173-A covers the case.  

17. We  may  also  notice  one  of  the  submissions

vehemently  raised  by  the  learned  counsel  for  the

respondents  that  the  respondents  were  forced  to

deposit the conversion charges, which they deposited

under  the  protest.  The  copy  of  the  writ  petition

filed by the respondents has been brought on record

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as  Annexure-P/12.  In  paragraph  Nos.  5,6  and  7,

following has been pleaded by the respondents:

“5. That the petitioners intended to get the aforesaid  plot  of  land  admeasuring 10067.14 sq.yards which is equivalent to 8420.56  sq.  meters,  developed  by constructing  a  multi-storeyed commercial-cum-residential  complex.  In this  connection,  on  having  been approached  the  respondents  No.2  &  3 asked to apply with them for land use conversion as a condition precedent so that  maps  of  building  plans  can  be approved  for  constructing  commercial- cum-residential complex.

6. That the respondents No 2 & 3 vide order bearing  No.F.13/At.Mu.N.Niyo./  dated 22.02.2003 directed to deposit an amount of  1,01,04,672/-  towards  conversion charges. The copy of the aforesaid order dated  22.02.2003  is  being  enclosed herewith and marked as Annexure.2.

7. That in pursuance of the aforesaid order passed by the respondents No.2 & 3, the humble  petitioners  reserving  their rights deposited the amount so demanded i.e. a sum of Rs.1,01,04,672/- through pay order dated 20.03.2003 drawn on City Bank, M.I.Road, Jaipur vide duly filled challan dated 16.1.2003/20.3.2003 under Covering  Letter  dated  20.3.2003. Consequently,  receipt  dated  20.3.2003 was  issued  from  office  of  respondents No.2 & 3 in proof of said amount having been  duly  deposited.  The  photocopy  of the  Covering  letter  dated  20.3.2003 along with receipt dated 20.3.2003 and challan  dated  16.1.2003/20.3.2003  are being enclosed herewith and collectively marked as Annexure-3.”

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18. The  above  pleading  of  the  respondents  only

indicates that when they intended to construct multi-

storeyed  building  for  commercial-cum-residential

complex they were told to deposit conversion charges

as a condition precedent for sanction map. Learned

Single  Judge  in  its  judgment  had  noted  that  the

respondents  intended  to  deposit  conversion  charges

for  the  land  use  as  commercial-cum-residential

complex. The submission of the learned counsel for

the respondents that they were forced to apply for

conversion of land use from residential to commercial

does  not  commend  us.  Whether  the  respondents  were

liable to deposit the conversion charges is to be

determined  in  accordance  with  the  statutory  Scheme

and statutory requirement. In the event, under the

Statute  they  were  obliged  to  obtain  conversion  of

land use from residential to commercial, they were

bound to do the same and the fact that they were

asked  by  the  Corporation  to  do  the  same  is

inconsequential.

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19. The Division Bench in the impugned judgment has

been  unduly  led  by  the  fact  that  land  which  was

purchased  in  the  year  1959  is  being  used  for

commercial purpose. The Division Bench did not advert

to sub-section (2) of Section 173-A as amended by Act

19  of  1999  and  its  consequences.  The  total

consideration  of  the  Division  Bench  on  the  entire

case is in paragraph Nos.7, 8 and 9 which are to the

following effect:

“7.  We  have  gone  through  the  property document  which  shows  that  the  land  was purchased  in  the  year  1959  and  the  same property  was  used  by  the  company  for commercial  purposes.  In  our  considered opinion, with a view to avoid any delay in their  construction  activities,  the appellants  have  paid  the  amount  under protest to the respondents.

8. In that view of the matter, respondents are not entitled for conversion charges and the amount deposited by the appellants is required  to  be  refunded  with  immediate effect.

9. The respondents are directed to refund the  said  amount  alongwith  interest  @  6% within a period of three months from today. If the payment is not made within a period of  three  months,  the  appellants  will  be entitled for interest @ 9% and difference of 3% will be recovered from the officer who has made delay in making payment.”

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20. We are of the view that the Division Bench did

not consider the issues raised in the appeal in the

correct  perspective  and  has  not  adverted  to  the

effect  and  operation  of  the  statutory  Scheme  as

delineated  by  sub-section  (2)  of  Section  173-A  as

amended  by  Act  19  of  1999.  The  judgment  of  the

Division Bench, thus, cannot be upheld.

21. We may also notice that this Court in Municipal

Corporation,  Rajasthan  (supra)although  had  allowed

the appeal but gave liberty to the respondents to

take up the issue before the Corporation regarding

land use in the Master Plan which was in operation at

the  relevant  time.  In  paragraph  No.14  of  the

judgment, following has been observed:

“14. The learned Counsel appearing for the  respondents,  however,  submitted  that the  area  in  question  is  notified  as 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 up this issue before the  Corporation  and  it  is  for  the Corporation  to  consider  that  issue  in accordance  with  law.  Appeals  are

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accordingly  allowed  and  the  judgments  of the  High  Court  are  set  aside.  However, there will be no order as to costs.”

22. In  the  present  case,  learned  Single  Judge  has

made following observation:

“It  is  also  not  disputed  that  in  the Master Plan area in question is ear marked for  commercial  use  and  it  is  also  not disputed the earlier the area in question is used for commercial purpose. Therefore, the  petitioner  moved  application  for conversion  for  approval  of  map  for constructing a commercial building.”

23. Although  learned  Single  Judge  made  the  above

observation, but the judgment does not indicate that

said observations were made after looking into the

Master  Plan  which  was  in  force  at  the  time  of

submission of application by the respondents.  

24. The Division Bench did not advert to either sub-

section (2) of Section 173-A or to the land use in

the Master Plan at the relevant time, i.e., in the

year 2002 when the respondents made an application

for  sanction  of  building  plan.  The  appellants

although have brought on record the Land Use Plan

2011, which is in force w.e.f. 01.09.1998 along with

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their  rejoinder-affidavit  but  since  during  the

submission  learned  counsel  for  the  respondents  has

contended that the said Land Use Plan 2011 does not

conclusively establish that land use of Plot No.21

was residential, we are, thus, of the view that ends

of justice shall be served in giving liberty to the

respondents  to  submit  a  representation  before  the

Corporation, if there are any materials and grounds

that in the Master Plan which was in operation in the

year 2002, when respondents submitted an application

that  land  use  of  Plot  No.21,  Lal  Niwas  was  not

residential  but  commercial.  Subject  to  the  above

liberty,  the  appeal  is  allowed  and  the  impugned

judgment is set aside. Parties shall bear their own

costs.

    ......................J.                                ( ASHOK BHUSHAN )

......................J.                                ( NAVIN SINHA )

New Delhi, August 05, 2019