NATHIA DEVI vs NEW DELHI MUNICIPAL COUNCIL & ANR

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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CM(M) 972/2018 & CM APPL. 33895/2018
NATHIA DEVI ….. Petitioner
Through: Ms. Aastha Dhawan, Advocate

versus

NEW DELHI MUNICIPAL COUNCIL & ANR ….. Respondents

Through: Mr. Sriharsha Peechara, ASC with Ms. Harshita Gupta and Mr. Shubham Kumar Mishra, Advocates.
(Ph.9717466788, e-mail: shpeechara@gmail.com)

% Date of Decision: 20th October, 2023

CORAM:
HON’BLE MS. JUSTICE MINI PUSHKARNA
J U D G M E N T
MINI PUSHKARNA, J: (ORAL)
1. The present petition lays challenge to the Judgment dated 29th May, 2018 (“impugned Judgment”) passed by District and Sessions Judge, New Delhi, Patiala House Court in an appeal filed on behalf of respondent, New Delhi Municipal Council (“NDMC”) under Section 7 of the Public Premises (Eviction of Unauthorized Occupants) Act, 1971 (“PP Act”), being PPA No. 38/2017. By the impugned Judgment, the learned District and Sessions Judge has directed the petitioner herein to pay damages @ Rs. 17,677/- per month w.e.f 24th January, 2017 for unauthorized occupation of Kiosk situated near Gate No. 6, Palika Bazar, New Delhi-110001 (“Subject Kiosk”).
2. At the outset, it is noted that this Court vide Judgment dated 4th July, 2023 in C.M.(M) 650/2018 has already upheld the decision of the Estate Officer and the learned District and Sessions Judge holding the petitioner herein as an unauthorized occupant of the subject kiosk. Appeal by the petitioner, being Special Leave to Appeal (C) No. 16025/2023 against the aforesaid Judgment dated 4th July, 2023, was dismissed by the Supreme Court vide order dated 25th August, 2023. Thus, the status of the petitioner as an unauthorized occupant of the subject kiosk w.e.f 24th January, 2017 has become final.
3. The present case pertains to the issue of damages payable by the petitioner for the unauthorized occupation of the subject kiosk.
4. On behalf of the petitioner, attention of this Court has been drawn to order dated 12th May, 2022 passed in the present proceedings. In the said order, the contention of the petitioner with respect to the NDMC raising bills for damages at the rates decided by the learned Estate Officer was considered. Thus, it is submitted by learned counsel for the petitioner that the petitioner is liable to pay damages only @ Rs. 17,677/- per month as held by the learned District and Sessions Judge in the impugned order dated 29th May, 2018, as opposed to Rs. 31,275/- per month, which was held to be payable by the learned Estate Officer in its order dated 20th July, 2017 in Case No. 01/2017/EO.
5. Learned counsel for the petitioner has further submitted that payments towards license fee had been made on behalf of the petitioner till October, 2019, which are required to be adjusted by the NDMC towards the amount of damages payable by the petitioner.
6. On the other hand, learned counsel appearing for NDMC submits that NDMC will charge damages from the petitioner in terms of the judgment dated 29th May, 2018 passed by the learned District and Sessions Judge, whereby damages @ Rs. 17,677/- per month has been fixed.
7. Since the petitioner has already been held to be an unauthorized occupant of kiosk situated near Gate No. 6, Palika Bazar, New Delhi-110001, which finding has attained finality in view of order dated 25th August, 2023 passed by Supreme Court in Special Leave to Appeal (C) No. 16025/2023, there is no doubt that the petitioner is liable to pay damages for the said unauthorized occupation.
8. One of the principle grounds raised on behalf of the petitioner was that the District and Sessions Judge had erred in granting damages in favour of the respondent without appreciating that the said provisions would be attracted only after the petitioner is adjudged as an unauthorized occupant in the premises, and her eviction order is confirmed and final. However, in view of the fact that occupation of the petitioner has been held to be unauthorized and the said finding has attained finality, this ground as raised on behalf of the petitioner no longer survives.
9. Even otherwise, the NDMC was well within its jurisdiction to initiate proceedings against the petitioner simultaneously under Section 5 of the PP Act for eviction of the petitioner as well as under Section 7 of the PP Act for recovery of damages against the petitioner herein. There is no bar to initiate both the proceedings under Sections 5 and 7 of the PP Act simultaneously against a person who is sought to be evicted from public premises. Therefore, the contentions raised by the petitioner in this behalf are not sustainable. Holding that proceedings under Section 7 of the PP Act to claim damages can be initiated simultaneously with proceedings under Section 5 of the PP Act, this Court in the case of Dunlop India Ltd. Vs. Bank of Baroda & Anr.1, has held as follows:
“29. When simultaneous petitions are preferred under Sections 4, 5 & 7 of the Act, the Estate Officer would first determine the preliminary issue as to whether the occupant is an unauthorized occupant, or not and only thereafter would he proceed to consider the issue as to whether the occupant is liable to pay damages or not, and if so, at what rate and for what period. In case the Estate Officer were to conclude that the occupant is not an unauthorized occupant, not only would he dismiss the petition under Sections 4 & 5, but also the petition under Section 7 of the Act, since the necessary ingredient for determination and levy of damages, viz. the status of the occupant as an unauthorized occupant would be missing. However, if he finds that the occupant is an unauthorized occupant, he would determine the date on and from which the occupant becomes an unauthorized occupant and from that date onwards by operation of law, the occupant would become liable to pay damages. The Estate Officer would then determine the rate at which the damages are payable for the period of unauthorized occupation, if any. Merely because these two separate and distinct issues arise to be determined and the decision on the subsequent issue, namely, the assessment of damages, if any, is dependent on the determination of the first issue with regard to the status of the occupant (i.e. whether he is an authorized occupant or an unauthorized occupant), it does not mean that the Estate Officer cannot proceed to issue notice on the proceedings under Section 7 simultaneously with the issuance of the notice under Sections 4 & 5 of the Act. It also does not mean that the Estate Officer cannot record comprehensive evidence on both the issues at the same time. The Estate Officer would, however, proceed to determine the issue of damages, if any, only after he has recorded his satisfaction to the effect that the occupant is an unauthorized occupant. The Act has been enacted to provide a speedy remedy in respect of public premises. The provisions of the Act should be interpreted keeping in view this objective. It does not stand to reason that the Claimant should first be expected to await a finding of unauthorized occupation, in a proceeding under Sections 4 & 5 of the Act, before even initiating a proceeding under Section 7 to claim damages for the period the occupant is claimed to be an unauthorized occupant.

30. I, therefore, reject the submission of the petitioner that the proceedings under Section 7 could not have been initiated or proceeded with simultaneously with the proceedings under Sections 4 & 5 of the Act, and that the petitioner could not have been required to lead its evidence on the respondents claim for damages under Section 7 simultaneously with the evidence on the aspect whether the petitioner is an unauthorized occupant or not. I also reject the petitioner’s submission that the Estate Officer has no jurisdiction to proceed with the proceedings under Section 7 of the Act unless and until the proceeding under Sections 4 & 5 culminate with a finding of unauthorized occupation of the occupant concerned. He may proceed with the said proceedings, however, before deciding on the issues arising in those proceedings, he must decide on the status of the occupant.”
(Emphasis Supplied)

10. In the present case, vide order dated 24th January, 2017, the allotment of the subject kiosk in favour of the petitioner was cancelled. Therefore, the petitioner became an unauthorized occupant of the subject kiosk w.e.f. 24th January, 2017, from which date the petitioner is liable to pay damages to the NDMC.
11. This Court finds no infirmity in the circular dated 16th August, 2016 issued by the NDMC, based upon which the damages payable have been calculated against the petitioner. The circular dated 16th August, 2016 issued by the NDMC, as reproduced in the impugned judgment, reads as under:

“ESTATE – I DEPARTMENT
NEW DELHI MUNICIPAL COUNCIL
PALIKA KENDRA : NEW DELHI

No.D-1043/SO(Estate-I)/2016 Dated: 16.8.2016
Circular

Subject: Policy on licences of NDMC’s shops, kiosks, pan tharas and issues related thereto.

The need for laying down a simple and transparent policy on grant and renewal of license, transfer of license, change of trade etc. and other issues in respect of shops kiosks, pan tharas have been under consideration of the New Delhi Municipal Council(NDMC) for some time.

2.1 Accordingly a Sub-committee under section 9 of the NDMC Act, 1994 was constituted by the Council vide its Resolution No. 18(L-08) dated 15.12.2015 for the purpose with (i) Chairman, NDMC, (ii) Vice Chairman, NDMC (iii) Hon’ble Member of Parliament(Lok Sabha- New Delhi constituency); and (iv) three nominated Members of the Council, as Members to examine all issues involving general conditions for licensees, change of trade, renewal of licence, transfer of partnership/legal heir basis, clubbing of units, loft & mezzanine floor, damages on cancellation, non-renewal of licence, et. in the background of past and extant practices as well as resolutions of the Council on the subject. Secretary, NDMC was convener and Financial Advisor, NDMC was a co-opted Member of the Sub-Committee……

2.2 During the course of deliberations, the Sub-Committee consulted market associations of NDMC markets as well as Estate Department of NDMC dealing with the subject matter, and examined their comments in the light of past and present policies and unresolved issues pending since long with aim of simplifying and streamlining the processes and procedures for management of NDMC shops, kiosks and Pan Tharas and their licensing. After carefully examining all aspects of unresolved issues of licencing of shops. Kiosks and Pan Tharas and other related issues thereto mentioned in the forgoing para, the Sub-Committee submitted its report containing recommendations to the Council for consideration. After careful consideration and approval of recommendation of the Sub-Committee, was approved by the Council, the following policy takes effect as decided/approved by the Council in its meeting held on 27.06.2016 vide Resolution No. 31 (L-08) with immediate effect……

9. Damages on Cancellation and revocation of cancellation of licence

(i) All cases before issuing this Circular i.e. 16.08.2016 shall be treated as per the Council’s resolution applicable as on that date.
(ii) From 16th August, 2016 on cancellation of the licence, the damages may be charged at 130% of the last applicable licence fee. The damage charges shall increase at compounding rate of 10% annually. These charges shall continue, so long, as the cancellation of licence continue. If cancellation order is withdrawn/quashed, the damages may be reduced only from the date or order of withdrawal/quashing of the order of the cancellation, and the charges already collected may not be refunded or adjusted.

10. Interest rate on delayed or non-navment
(i) …..
(ii) Interests on default payments are charged to discourage any late payment, and to protect the interest of the NDMC. Therefore, from 27th June 2016, interests may be charged at the rate of 1.25% per month (i.e. 15% per annum) from the 1st of succeeding month when the allottee fails to pay the licence fee………..”

12. Reading of the circular dated 16th August, 2016 issued by the NDMC manifests that the quantum of damages have been laid down by the said circular in terms of recommendation of the Sub-Committee constituted for the said purpose. The quantum of damages were prescribed by the Sub-Committee of the NDMC after wide consultation with all the stakeholders and after careful examination of the matter and due consideration of all the suggestions received. The said Sub-Committee consisted of the Chairman and the Vice Chairman of NDMC, a Member of Parliament and three nominated members of the council.
13. It may also be noted herein that the subject kiosk is situated in the prime commercial area of Palika Bazar, New Delhi, which is a primary commercial centre in central part of Delhi with a high foot fall.
14. Section 7 of the PP Act lays down the criteria about assessment of damages. The said Section reads as under:
“7. Power to require payment of rent or damages in respect of public premises.—(1) Where any person is in arrears of rent payable in respect of any public premises, the estate officer may, by order, require that person to pay the same within such time and in such instalments as may be specified in the order.
(2) Where any person is, or has at any time been in unauthorised occupation of any public premises, the estate officer may, having regard to such principles of assessment of damages as may be prescribed, assess the damages on account of the use and occupation of such premises and may, by order, require that person to pay the damages within such time and in such instalments, as may be specified in the order.
49[(2-A) While making an order under sub-section (1) or sub-section (2), the estate officer may direct that the arrears of rent or, as the case may be, damages shall be payable together with 50[compound interest] at such rate as may be prescribed, not being a rate exceeding the current rate of interest within the meaning of the Interest Act, 1978 (14 of 1978).]
(3) No order under sub-section (1) or sub-section (2) shall be made against any person until after the issue of a notice in writing to the person calling upon him to show cause 51[within seven days from the date of issue thereof], why such order should not be made, and until his objections, if any, and any evidence he may produce in support of the same, have been considered by the estate officer.
52[(3-A) If the person in unauthorised occupation of residential accommodation challenges the eviction order passed by the estate officer under sub-section (2) of Section 3-B in any court, he shall pay damages for every month for the residential accommodation held by him.]
53[(4) Every order under this section shall be made by the estate officer as expeditiously as possible and all endeavour shall be made by him to issue the order within fifteen days of the date specified in the notice.]”

15. Perusal of Section 7 of the PP Act makes it evident that the damages have to be assessed by having regard to such principles of assessment of damages, as may be prescribed. Rule 8 of the Public Premises (Eviction of Unauthorized Occupants) Rules, 1971 (“PP Rules”) lays down the matters which may be taken into consideration while assessing the damages for unauthorized use and occupation of any public premises. Rule 8 of PP Rules reads as under:
“8. Assessment of damages.—In assessing damages of unauthorised use and occupation of any public premises the estate officer shall take into consideration the following matters, namely,—
(a) the purpose and the period for which the public premises were in unauthorised occupation;
(b) the nature, size and standard of the accommodation available in such premises;
(c) the rent that would have been realised if the premises had been let on rent for the period of unauthorised occupation to a private person;
(d) any damage done to the premises during the period of unauthorised occupation;
(e) any other matters relevant for the purpose of assessing the damages.”

16. Considering Section 7 of the PP Act and Rule 8 of the PP Rules, no error is found in the criteria laid by the NDMC for assessment of damages as per its circular dated 16th August, 2016.
17. The damages payable by the petitioner have been calculated on the basis of the Circular of the NDMC dated 16th August, 2016, which prescribes damages on cancellation of license at 130% of the last applicable license fee. It further prescribes that the damage charges shall increase at compounding rate of 10% annually. In terms of the said Circular, the Estate Officer had calculated the damages @ Rs. 31,275/- per month vide its judgment dated 20th July, 2017. However, by the impugned judgment dated 29th May, 2018, the learned District and Sessions Judge has reduced the said amount to Rs. 17,677/- per month, thereby holding that the learned Estate Officer had erred in calculating the damages as per the criteria laid down in the Circular of the NDMC. In view thereof, it is held that the petitioner is liable to pay damages @ Rs. 17,677/- per month w.e.f. 24th January, 2017 in terms of the judgment dated 29th May, 2018 passed by the learned District and Sessions Judge. Needless to state, the payments that have already been made by the petitioner towards license fees after the issuance of cancellation order dated 24th January, 2017 shall be adjusted by the NDMC while calculating the amount of damages payable by the petitioner.

18. In view of the aforesaid detailed discussion, no error is found in the impugned judgment awarding damages in favour of NDMC on account of unauthorized occupation of the subject kiosk by the petitioner. Accordingly, the present petition is dismissed, along with pending application.

MINI PUSHKARNA, J
OCTOBER 20, 2023
AK
1 2009 SCC OnLine Del 17
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