Holding

The ban was lawful, no deemed sanction arose, the DDA may levy only simple interest on instalments, is not liable for interest during the ban, may charge a compounding fee but not interest on that fee.

Summary

Ansals Properties won the lease‑hold auction for a plot in Nehru Place but failed to pay the balance amount, leading the Delhi Development Authority (DDA) to renegotiate payment terms with interest at 18% per annum. The appellant submitted building plans, but the Central Government imposed a ban on multi‑storey construction pending a new master plan, which the DDA enforced. The appellant claimed a deemed sanction for the plans, argued that the DDA’s interest was compound and unlawful, and contested the levy of a compounding fee and interest on it. The Supreme Court held that the ban was lawful, the conditions for deemed sanction were not met, the DDA could charge only simple interest on the instalments, was not liable for interest during the ban, and could levy a compounding fee but not interest on that fee. The Court partly allowed the appeals, modifying the High Court order to remove interest on the compounding fee while upholding the rest of the order.

Issues considered

The Central Government’s ban on high‑rise construction during master‑plan formulation – whether it was lawful.
Whether the appellant was entitled to a deemed sanction under Bye‑law 6.7.4.
Whether the DDA’s charge of 18% interest on instalments constituted compound interest.
Whether the DDA could charge interest for the period of the governmental ban.
Whether the DDA could levy a compounding fee for unauthorised construction.
Whether interest could be charged on the compounding fee.

Legislation cited

Delhi Development Act, 1947s. 41, s. 9(2)
Delhi Urban Art Commission Act, 1973s. 12

Subjects

Delhi Development Authorityleasehold auctionmaster planhigh‑rise bandeemed sanctionsimple interestcompound interestcompounding feebuilding bye‑lawsDelhi Urban Art Commission

Judgment

ANSAL PROPERTIES & INDUSTRIES (P) LTD. AND ANR. A
v.
DELHI DEVELOPMENT AUTHORITY AND ORS.

MAY 28, 1992

[N.M. KASLIWAL AND R. M. SAHAI, JJ.] B

Delhi Development Act, 1947-Sections 9(2), 41-Legis/ative ob-
ject-Master plan-Restriction 011 high rise constroction by Central Govern-
ment-Legality of.
- De/Iii Development Act, 1947-Sections 41 read with Bye-Laws 6. 7.4,
c
6.1 of the Building Bye-Laws, 1983 of the Delhi Development Authority-Re-
qu irem ent unde,.-.Deemed sanction-When arises-Compounding
fee-Charging of interest-Whether arises.

The auction of leasehold rights on the plot in question was in favour D
of the appellants for Rs. 8.13 crores on 19.1.1981. The appellant paid 25%
of the auction amount on the fail of the hammer. According to the terms
and conditions of the auction the balance 75% was required to be paid
within 90 days of the formal acceptance of the bid which was made on
18.2.1982. E
The appellants did not pay the balance amount and took a stand
that there was some confusion as to whether it was D.D.A. or the Union of
India, which was the owner of the plot in question. The appellant also
sought for time for payment on the ground that money market in relation
to the land property had gone down tremendously. F
On 14.17.1984 revised terms were communicated by the D.D.A. to the
appellants. The essential terms of the revised agreement were that 25% of
the bid amount was to be paid within 90 days of the issuance of the letter
of revised terms. 50% of the remaining bid amount along with interest for G
delayed payments was to be paid in five equal half yearly instalments which
included the interest calculated at 18% per annum.

The appellants submitted a bank guarantee dated 15th July, 1985 in
favour of the D.D.A. The fresh schedule of instalments was specifically
mentioned in the bank guarantee. Thereafter on 23.7.1985, a formal deed H
465
y

466 SUPREME COURT REPORTS (1992] 3 S.C.R.

A of agreement was executed between the parties and poss~ssion over the
plot was given on 25.7.1985. The building plans were submitted by the
appellant on 12.8.1985. The D.D.A. forwarded building plans to the Delhi
Urban Arts Commission (DUAC). The DUAC by its letter dated 18.9.1985
sought certain clarifications from the appellant within ten days and again
B sent a reminder on 24.9.1985, but the appellant did not send any reply.

The appellant sent a notice for commencement of construction on
15.10.1985 claiming that they having not received any order of rejection of
the plans within sixty days as contemplated under bye-law No.6.7.4 had
become entitled to deemed sanction; that the first instalment, according to
C the re-schedule of instalments was payable on 15.11.1985 but even before
that they had paid Rs. 47 lakhs on 8.10.1985 itself.

Thereafter the Government of India by an office memorandum dated
17.10.1985 decided to stop construction of multi-storeyed buildings 'in New
Delhi including areas under D.D.A. and Municipal Corporation, with
D immediate effect till the Master plan for 2001 was finalised.

The DUAC then returne«' t.~he proposals of the building plans of the
appellants to the D.D.A. on "J.11.1985. The D.D.A. by its letter dated
9.12.1985 informed the appellants regarding the decision of the Govern-
E ment of India and returned the building plans and it was directed not to
process the sanction further till further directions were received from the
Government of India.

A notice to stop the construction immediately till the plans were
sanctioned finally by the D.D.A. was given to the appellants on 17.1.1986.
F
On 25.3.86 the D.D.A. informed the appellants that their plans had
been rejected as the same had not been approved by the DUAC.

The appellants filed writ petition challenging the notice issued by the
D.D.A. of stopping the construction work and also the ban introduced by
G the Government of India.
The High Court on 17.9.1986 passed an interim order permitting the
appellants to continue the construction work at their own risk.

On 15.10.1987 the bank guarantee was invoked by the D.D.A. for a
H sum of Rs.8 crores approximately.
ANSAL PROPERTIES v. D.D.A 467

The appellants filed a seeond writ petition challenging the encash- A
ment of the bank guarantee by D.D.A. and obtained an interim-order on
28.10.1987 restraining the D.D.A. from encashing the bank guarantee.

The ban imposed by the Central Government was lifted on 8.2.1988.
The appellants completed the constmction of the building in 1988 under B
the cover of the stay order given by the High Court. The two writ petitions
were dismissed by the High Court.

These appeals were filed by the contractors against the judgment of
the High Court, by special leave, contending that the D.D.A. was not

- entitled to charge any compound interest; that the D.D.A. was not entitled
to claim any interest for the period 7.10.1985 to 8.2.1988 during which the
ban in respect of construction of multi-storeyed buildings remained in
C

force; that the ban itself was also illegal; that the D.D.A. was not entitled
to claim any compounding fee; and that the D.D.A. was not entitled to
claim any interest on the compounding fee.
D
Partly allowing the appeals of the contractors, this court,

HELD: 1.1. The object of Delhi Development Act is to provide for the
development of Delhi according to the plan. While under Section 9(2) of
the Delhi Development Act every master plan has to be submitted to the E
Central Government for approval and the Government may either approve

- the plan without modifications or with such modifications as it may
consider necessary or reject the plan with directions to the Authority to
prepare a fresh plan according to such directfons. The Development
Authority had sent the new master plan for approval of the Central
Government and as such the Government for the planned development or F
Delhi was entitled to issue directions in consonance with law. (475 H-476B]

1.2. There was no violation of law in issuing a restriction on high rise
constmctions during the formulation stages of the new master plan pend·
ing for approval before the Central Government. Thus it cannot be said G
that the ban imposed by the Central Government was in any manner
unauthorised or illegal. (476 DJ

2.1. The question of deemed sanction only arises If within sixty days
of the receipt of notice under 6.1. of the bye-laws the authority fails to
Intimate In writing to the person who has given· a notice of its refusal or H
y

I
468 SUPREME COURT REPORTS [1992) 3 S.C.R.
lJ
A sanction or any intimation. [478 BJ
2.2 In the instant case the D.D.A. had informed the appellant that
r
the plans had been sent to DUAC for approval and the DUAC was also
seeking some clarifications from the appellant by their letters dated
18.9.1985 and 24.9.1985. (478 B]
B
2.3. The requirement as contemplated under bye-law· 6.7.4 is that the ~

fact of deemed sanction has to be immediately brought to the notice of the
authority in writing by the person who bas given notice and thereafter if ~
no intimation is received from the authority within 15 days of giving such
written notice the provision of deemed sanction comes into operation.
c [478 CJ

2.4. The appellant only sent a notice for commencement of construe·
tion on 15.10.1985 and the same does not fulfil the requirement of the
notice which i's contemplated under bye-law 6.7.4 in as much as intimation
D had already been given by DUAC seeking information. Apart from this the
ban on the construction of multi-storeyed buildings came into operation
from 17.10.1985 itself and in view of this circumstance also there was no
question of the applicability of deemed sanction in the facts of this case.
[478 D-E]

E 2.5. The amount which was required to be paid in five instalments of
Rs.166.20 lakhs each from 15.11.1985to15.11.1987, included simple interest
charged at the rate of 18% per annum but it was based on a fresh agreement
and the appellants cannot claim any right to re-open the transaction on the
basis of terms of auction made originally in 1982. The indulgence of re-
scheduling of delayed payment of bid amount in July, 1985 was made on the
F request of the appellant and for its own benefit. Thus the D.D.A. is perfectl3
-
right andjustified in claiming future interest at the rate of18% per annum on
the instalments fixed in the agreement dated 23rd July, 1985. The D.D.A. is ~
not charging any compound interest but are claiming simple interest at the
rate of 18% per annum on the amount of instalments fixed in the fresh
G agreement dated 23rd July, 1985 till payment, After novation of the agree-
ment the instalments fixed shall be considered as principal amount and thus
it is not a case of charging compound interest. (474 H-475 C)

2.6. For charging of interest during the ban period is concerned, the
D.D.A. cannot be held responsible as the ban ·was imposed by the Central
H . Government. This action was taken for the whole of Delhi and the D.D.A.
ANSAL PROPERTIES v. D.D.A [KASLIWAL, J.) 469

was to carry out such directions as provided under Section 41 of the Delhi A
Development Act, 1957. (475 D-EJ

2.7. It is not in dispute that the building has been constructed
without any sanction or permit from the D.D.A. as required under the
building bye-laws !lnd the building has been constructed at the risk of the
appellant under the stay order of the High Court. (478 F] B
2.8. No building permit has been given to the appellants and as such
they are bound to pay the compounding fee according to the rates
prescribed in this regard. (479 CJ

2.9. In the facts and circumstances of the case the D.D.A. is not C
e,ntitled to charge any interest on the compounding fee. [479 DJ

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2457 and
58of1992.

From the Judgment and Order dated 31.10.1991 of the Delhi High D
Court in C.W.P. Nos. 1499/86 and 3068 of 1987.

Harish Salve, Ms. J.S. Wad, Ms. Tamali Wad and Manoj Wad for
the Appellants.

).... V.R. Reddy, Addi. Solicitor General, Arun J aitley, Ms. Indu Mal- E
hotra, C. Ramesh, V.K. Verma and C.V.S. Rao for the Respondents.

D.D. Sharma, C.L. Chopra and Ms. Rachna Issar for the Intervener.

The Judgment of the Court was delivered by
F
KASLIWAL, J. Special leave granted.

It is one more avoidable litigation between Ansals, a big building
contractor and the Delhi Development Authority in which allegations and
counter allegations for breach of terms of contract have been levelled G
against each other. We would have asked the appellant to stand in queue
for hearing of the matter, but the real sufferers would be those persons
who have invested the.ir hard earned life time savings in forlorn hope of an
allotment of a flat in a commercial building on plot No. 38 situated in
Nehru Place near Kalkaji a prime place of importance in Delhi. It is the
repetition of the usual bureaucratic rigmarole from the side of the Delhi H
y

470 SUPREME COURT REPORTS (1992] 3 S.C.R.

A Development Authority anci th usual payment of some instalments of the
lease money and thereafter withholding the payment of the balance amount
on one pretext or the other form the side of the builders.

Facts in brief, shorn of details and necessary for the disposal pf this
case are that the auction of leasehold rights on plot No. 38, Nehru Place
B was knocked down in favour of Mis Ansal Properties & Industries (P) Ltd.,
hereinafter referred to as "the appellant" for Rs. 8.13 crores on 19.1.1981.
25% of the auction amount was paid on the fall of the hammer. According
to the terms and conditions of the auction the balance 75% was required
to be paid within 90 days of the formal acceptance of the bid which was
C made on 18.2.1982. The appellant admittedly did not pay the balance
amount and took a stand that there was some confusion as to whether it
was D.D.A or the Union of India, which was the owner of the plot in
question. The appellant also sought the indulgence of granting more time
for payment on the ground that money market in relation to the land
property had gone dowp tremendously. On 14.12.1984 revised terms were
D communicated by the D.D.A to the appellant. The essential terms of the
revised agreement were that 25% of the bid amount was to be paid within
90 days ofthe issuance of the letter of revised terms. 50% of the remaining
bid amount along with interest for delayed payments was to be paid in five
equal half yearly instalr11ents which included the interest calculated at 18%
E per annum. These instalments were fixed in the following manner :
(i) 1st instalment payable on 15.11.1985 Rs. 166.20 lacs.

(ii) 2nd instalment payable on 15.5.1986 Rs. 166.20 lacs.

F (iii) 3rd instalment payable on 15.11.1986 Rs. 166.20 lacs.

(iv) 4th instalment payable on 15.5.1987 Rs. 166.20 lacs.

(v) 5th instalment payment on 15.11.1987 Rs. 166.20 lacs.

G The appelhnt in this regard submitted a bank guarantee dated 15th
July, 1985 of the Canara Bank and New Bank of India in favour of the
D.D.A. The aforesaid fresh schedule of instalments was specifically men-
tioned in the bank gqarantee. Thereafter a formal deed of agreement was
executed between the parties on 23.7.1985 and possession over the plot was
given on 25.7:1985. The building plans were submitted by the appellant on
H 12.8.1985. The D.D.A. vide letter dated 13.9.1985 forwarded building plans
'fI

ANSAL PROPERTIES v. D.D.A [KASLIWAL, J.] 471

to the Delhi Urban Arts Commission (DUAC). The DUAC by its letter A
dated 18.9.1985 sought certain clarifications from the appellant within ten
days and again sent reminder on 24.9.1985, but the appellant did not send
any reply. The appellant then sent a notice for commencement of construc-
tion on 15.10.1985. The appellant claimed that they having not received any
order of rejection of the plans within sixty days as contemplated under bye B
law No.6.7.4. had become entitled to deemed sanction. The appellant
' claimed that the first instalment, according to the re-schedule of instal-
ments was payable on 15.11.1985 but even before that they had paid Rs. 47
lakhs on 8.10.1985 itself. Thereafter the Govdnment of India by an office
memorandum dated 17.10.1985 decided to· stop construction of multi-
storeyed buildings in New Delhi includ~ng areas under D.D.A. and C

- Municipal Corporation of Delhi falling in .South Delhi, with immediate
.effect till the Master plan for 2001 was finalised. It was clarified that a
'multi-storeyed building' may be taken as a building going beyond. 45 feet
or above four storeys, which has to be serviced. by lifts. The DUAC then
returned the proposals of the building plans of the appellant to the D.D.A. D
on 20th November, 1985. The D.D.A. by its letter dated 9.12.1985 informed
the appellant regarding the decision of the Government of India and
returned the building " plans and requested them to depute their architect
to discuss about the height of the building. It was mentioned in the letter
that the sanction shall not be processed further till further directions are
received from the Ministry of Urban Development, Government of India. 'E
A notice to stop the construction immediately till the plans were sanctioned
fmally by the D.D.A. was given to the appellant on 17.1.1986. By another
letter dated 25.3.1986 the D.D.A. informed the appellant that their plans
had been rejected as the same had not been approved by the DUAC. The
appellants then filed writ petition No. 1499/86 on 17th July, 1986 challeng- F
ing the notice issued by the D.DA. of stopping the construction work and
also the ban introduced by the Government of India. The High Court on
17.9.1986 passed an interim order permitting the appellants to continue the
construction work at their own risk. On 15.10.1987 the bank guarantee was
. invoked by the D.D.A. for a sum oCRs. 8 crores approximately. The
appellants filed a second writ petition No. 3068 of 1987 challenging the G
encashment of the bank guarantee by D.D.A. and obtained an ·interim
order on 28.10.1987 restraining the D.D.A. from encashing the bank
guarantee. The ban imposed by the Central Government was lifted on
8.2.1988. The appellants completed the construction of the building in 1988
H
r
472 SUPREME COURT REPORTS [1992) 3 S.C.R.

A under the cover of they stay order given by the High Court. The aforesaid
two writ petitions have been disposed of by the High Court by order dated
October 31, 1991. The High Court after examining the matter in detail ~
arrived to the conclusion as under :-

"After considering the pleadings of the parties, documents on
B record and submissions made before this court, it is absolutely
evident that the petitioner has be~n consistently making
defaults in payment of_the amount due to the D.D.A. on one
pretext or the other. According to the terms of the auction, the
petitioner's bid was accepted on February 19, 1982 and the
c petitioner was supposed to deposit the balance 75% of the bid
amount within 90 days. The amount which ought to have been
deposited with the D.D.A. way back in 1982 has not been
deposited ·till this date. Further more at the request of the
petitioner, the D.D.A. entered into an agreement with the
-
petitioner. This agreement was entered into because the
D petitioner pleaded grave financial difficulty and according to
J._ .
the agreement, the first instalment had to be deposited by the
petitioner on or before November 15, 1985 and all subsequent
instalments on or before 15th November, 1987. Astonishingly,
till this date not even one full instalment has been deposited
E by the petitioner. Looking to the entire past conduct of the
petitioner, no indulgence can be granted in any manner because
any indulgence would be at the cost of public money". ·

The High Court then observed that after careful consideration of the
facts and the issues Qivolved in the case it would be proper to dispose of
F the writ petitions with the following directions:

(i) The petitioner is directed to pay the balance outstanding amount
due to the Delhi Development Authority, including interest at the rate of
18% per annum within a period of two months from today.
G
(ii) the respondent-D.DA. would be entitled to encash the bank
guarantee furnished by the petitioner. The amount recovered by encash-
ment of bank guarantee from the petitioner would stand adjusted from the
total outstanding amount. ,..

H (iii) On the petitioner's mal<ing the entire payment, the respondent
ANSAL PROPERTIES v. D.D.A [KASLIWAL, J.] 473

J shall sanction the building plans forthwith and in no case later than one A
month of receiving the entire outstanding amount from the petitioner.

(iv) Thereafter the petitioner shall apply for the grant of occupancy
certificate as per rules, if not already applied.

The respondent D.D.A. shall grant necessary certificate as per rules B
without any delay but in any event not later than two weeks from the date
\,.;- of the petitioner's submitting application pertaining to occupancy certifi-
cate.

_Subject to these directio_ns, both these writ petitions are dismissed. C
Counsel's fee is addressed at Rs. 5,000. It is made clear that if the petitioner
fails to comply with the above directions, the respondent shall be at liberty
to take necessary action as permi5sible according to law.

Aggrieved against the aforesaid Judgment of the High Court the
appellants by grant of special leave have come in appeal before this Court. D
We have heard learned counsel for the parties at length and have thorough-
ly perused the record. The contentions now raised before us on behalf of
the appellants can be summarised under the following points:

---
- _-(ifThe D.D.A. is not entitled to charge any compound interest.
E
(ii) The D.DA. is not entitled to claim any interest for the period
7.10.1985 to 8.2.1988 during which the ban in respect of construction of
"""'!"" multi-storeyed buildings remained in force. The ban itself was also illegal.

(iii) The D.D.A. is not entitled to claim any compounding fee which
amounts to Rs. 93 lakhs. F

(iv) The D.D.A. is not entitled to claim any interest on the com-
pounding fee.

We shall consider the above submissions in seriatim.
G
Point No.1 : It has been submitted by the Learned counsel for the
appellants that the authority to levy interest in the instant case flows from
the statutory directive issued by the Government and incorporated in the
letter dated 14.12.1984. This letter states that ".............The delayed payment
of premium will carry interest 18 per cent p.a. from the due date, viz. H
474 SUPREME COURT REPORTS (1992) 3 S.C.R.

A 17.5.1982, to the actual dated of payment... .....". The revised agreement ~
dated 23rd July, 1985 accordingly provides in clause 2 "........The balance
amount and the interest for delayed payment of the bid amount shall be
payable by the auction purchaser in five equated half yearly instalments
including interest calculated at 18 per cent per annum on the following
B dates .......".

It has been contended that the bank guarantee dated 15.7.1985 is
really a part of the same transaction. In fact the licence agreement of
23.7.1985 was issued clily upon furnishing of the bank guarantee dated
15.7.1985. It is submitt:\~ that the total amount demanded by the D.D.A.
C includes an element of Rs. 6.69 crores as further interest. This interest
amounting to Rs. 6.69 crores comprises of the following .......... (a) Rs. 3.27
crores is the interest on the balance unpaid premium of Rs. 3.60 crores (as
-
on 15.11.1985) (b) Rs. 3.42 crores is the interest on interest component
already included in the instalments referred to in the bank guarantee.
D
It has been contended that the further claim of interest on the five
instalments of Rs. 1.66 crores each amounts to charging compound interest
as the instalments already include interest. According to the appellants
even if the interest is charged then it should be a simple interest re-calcu-
lated as though the instalments instead of being paid in the period 1985-87 ----l --
E are being paid in 1991-92 on the same principle which was adopted when
the instalments were initially fixed in 1985. We find no force in the above
contention. As already mentioned above the auction was knocked down for
Rs. 8.13 crores on 19.1.1982. and the appellant had paid only 25% of the
auction amount on the fall of the hammer. According to the conditions of
F the auction the balance 75% was required to be paid within 90 days of the
formal acceptance of the bid which was made on 18.2.1982. The balance
amount was thus payable by 18.5.1982. Admittedly the appellant did not
pay the balance amount uptil 18.5.1982 and thereafter sought to raise
certain objections regarding the ownership of the plot in question, but
G ultimately made a request that due to money market in relation to the land
property having gone down tremendously some more time may be given
for making the balance payment. Thereafter a fresh agreement was ex-
ecuted by the appellant on 23.7.1985 re-scheduling the payment in instal-
ments and according to which the amount was required to be paid in five
instalments of Rs. 166.20 lakhs each from 15.11.1985 to 15.11.1987. This
H amount no doubt included simple interest charged at the rate of 18% per
-.
\

ANSAL PROPERTIES v. D.D.A (KASLIWAL, J.] 475

anntam but it was based on a fresh agreement and the appellants cannot A
claim any right to re-open the transaction on the basis of terms of auction
made originally in 1982. The indulgence of re-scheduling of delayed pay-
ment of bid amount in July, 1985 was made on the request of the appellant
and for its own benefit. Thus the D.D.A. is perfectly right and justified in
claiming future interest at the rate .of 18% per annum on the instalments B
fixed in the agreement dated 23rd July, 1985. The D.D.A. is not charging
any compound interest but are claiming simple interest at the rate of 18%
per annum on the amount of instalments fixed in the fresh agreement dated
23rd July, 1985 till payment. After novation of the agreement the instal-
ments fixed shall be considered as principal amount and thus it is not a

- case of charging compound interest as contended on behalf of the appel- C
(7
lants.

Point No. (ii) :- So far as charging of interest during the ban period
is concerned, the D.D.A. cannot be held responsible as the ban was
imposed by the Central Government. The Central Government by an office D
memorandum dated 17.10.1985 decided to stop construction of multi-
storeyed buildings in New Delhi including areas under D.D.A. and
Municipal Corporation of Delhi falling in South Delhi with immediate
effect till master plan for 2001 was finalised. This action was taken for the
whole of Delhi and the D.D.A. was to carry out such directions as provided
under Section 41 of the Delhi Development Act, 1957. There is no allega- E
tion that such action was taken malafidely and it cannot be considered as
a valid ground for not paying the interest for the period during which the

- ban on multi~storeyed constructions remained in force. It may also be
noted that so far as the appellant is concerned it was not affected by such
ban as the construction contained under the umbrella of stay order ob- F
tained from the High Court. According to the admitted case of the appel-
lant the construction of the building had completed in 1988 itself and as
such the appellant was not put to any loss on account of the ban imposed
by the Central Government.

The master plan for Delhi was formulated originally in 1962 with G
projections up to 1981. There was no provision in any law, master plan,
zonal development plans or building bye-laws wherein the appellant was
entitled to construct sixteen storeys. Thus the directive of the Central
Government dated 17.10.1985 imposing a ban on high rise structures was
not contrary to any law. The object of Delhi Development Act is to provide H
....
!

,-,

476 SUPREME COURT REPORTS [1992) 3 S.C.R.

A for the development of Dell_ii ~ccording to the plan. While under Section r-
9 (2) of the Delhi Developm~nt Act every master plan has to be subii!itted
to the Central Government for approval and the Government may either
approve the plan without modifications or with such modifications ~ it may
consider necessary or reject .the plan with directions to the Authority to
prepare a fresh plan according to such. directions. The Development
B Authority had sent the new master plan for approval of the Central
Government and as such the Government for the planned development of
Delhi was entitled to issue directions in consonance with law. Learned
counsel for the appellants has placed strong reliance on Bangalore Medical
Trust v. B.S. Muddappa and others, (1991) 3 JT 172. This case isdearly
c distinguishable since in that case the zonal plan statutorily provided for the
user of a plot of land as a park. Th~ Chief Minister contrary to the said
plan, sanctioned the plot for a nursing home. Thus there was a positive
-
violation of law in that case. In the case in hand before us there was no
violation of law in issuing a restriction on high rise constructions during
the formulation stages of the new master plan pending for approval before
-•
D
the Central Government.· Thus it cannot be said that the ban imposed-by
the Central Government was in any manner unauthorised o~.

Point No. (iii) :- It has been contended on behalf of the appellants
that no compounding fee can be levied since the D.D.A. had wrongfully
E withheld grant of sanction to the building plans submitted by the appellant.
It has been further contended that in view of the commitment made in the
licence deed as well as the agreement read together with the letter o~
14.12.1984, the D.D.A. was bound to sanction the plans. It has been
contended that when the plans were submitted to the D.D.A. for sanction
F on 12.8.1985, there was no sum outstanding as due and payable as all the
sums which were payable under the agreement up to that date had been
duly paid. According to the fresh agreement the first instalment was
payable on 15.11.1985 and so far as other payments are concerned the same
had already been paid by the appellants. Even according to the bye-laws,
the D.D.A. had to sanction plans within sixty days and the D.DA. had no
G justification of withholding the sanction as nothing was required to be done
on behalf of the appellants. It has been further contended that according
to the stand taken by the D.D.A. itself the sanction was not withheld on >- ~-

accotlnt of non-payment of any dues but on account of the ban put by the
Central Government. It has been further argued that in any .event, the
H building has been constructed pursuant to the interim orders of ~he High
ANSAL PROPERTIES v. D.D.A [KASLIWAL, J.] 477

Court which expressly permitted the construction of the building albeit at A
the risk ~d-c:ost of the appellant. The High Court has itself recorded a
finding
__,,_. that the 16 storeyed building stands constructed according to the
-·-bye-laws and even if a formal sanction is given now it should relate back
to the date on which such sanction ought to have been granted and the
building constructed by the appellant in the present case cannot be con- B
sidered as unauthorised in law.

\ The admitted fa~ts of the case are that the building plans were
submitted to the 0.0.A. on 12.8.1985 and the D.DA. had forwarded the
plans for approval of Delhi Urban Arts Commission (DUAC) on 13.9.1985.
Section 12 of the Delhi Urban Art Commission Act, 1973 clearly provides C
that notwithstanding anything contained in any other law for the time being
m force, every local body shall, before according approval in respect of any
building operation refer the same to the DUAC for scrutiny and the
decision of the Commission in respect thereof shall be binding on such
local body. The DUAC by its letter dated 18.9.1985 sought certain clarifica- D
tions from the appellant within ten days and again sent a reminder on
24.9.1985 but the appellants did not send any reply. On the other hand the
appellant sent notice of commencement of construction on 15.10.1985 and
on that basis is claiming that having not received any order of r~jection of
the plans within sixty days as contemplated under bye-law No.6.7.4 the
appellant had become entitled to deemed sanction. We find no force in E
this submission. As already mentioned above, it was necessary to obtain
the approval of the DUAC and the DUAC by letter dated 18.9.1985 and
24.9.1985 were seeking certain clarifications from the ,appellant. Bye-law
No.6.7.4 of the building bye-laws, 1983 of the Delhi Development Authority
reads as under:...,
F
"If within 60 days of the receipt of notice under 6.1 of the
Bye-Laws; the authority fails to intimate· in writing to the
person, who has given the notice, of its refusal or sanction or
any intimation, the notice with its plans and statements shall be
.deemed to have been sanctioned provided the fact is immedi- G
ately brought to the notice of the Authority in writing by the
person who has given notice and having not received any
intimation from the Authority within fifteen days of giving such
written notice. Subject to the conditions mentioned in this
bye-laws, nothing shall be construed to authorise any person to H
478 SUPREME COURT REPORTS (1992) 3 S.C.R.

A do anything in contravention or against the terms of lease or
titles of the land or against any other regulations, bye-laws or
ordinance operating on the site of the work".

According to the above provision the question of deemed sanction
only arises if within sixty day5 of the receipt of notice under 6.1 of the
B bye-laws the authority fails to intimate in writing to the person who has
given a notice of its refusal or sanction or any intimation. In the present
case the D.D.A. had informed the appellant that the plans had been sent
to DUAC for approval and the DUAC was also seeking some clarifications
from the appellant by their letters dated 18.9.1985 and 24.9-.1985. The
C further requirement as contemplated under bye-law 6.7.4 is that the fact of
deemed sanction has to be immediately brought to the notice of the
authority in writing by the person who has given notice and thereafter if
no intimation is received from the authority within 15 days of giving such
-
written notice the provision of deemed sanction comes into operation. In
the present case the appellant only sent a notice for commencement of
D construction on 15.10.1985 and the same in our view does not fulfil the
requirement of the notice which is contemplated under bye-law 6.7.4. in
asmuch as intimation had already been given by DU.AC seeking informa-
tion. Apart from this the ban on the construction of multi-storeyed build-
ings came into operation from 17.10.1985 itself and in view of this
E circumstance also there was· no questi?n of the applicability of deemed
sanction in the facts of this case. It is not dispute that the building has been
constructed without any sanction or permit from the D.D.A. as required
under the building bye-laws and the building has been constructed at the
risk of the appellant under the stay order of the High Court. Clause (B)
F of the Appendix "q" of the building bye-laws, 1983 provides for compoun-
dable items as under: -

COMPOUNDABLE ITEMS

Deviations in terms of covered area - If a building or part
G thereof has been constructed unauthorisedly i.e. without ob-
taining the requisite building permit from the authority as
required under clause 6.1 & 6.7.1 of the building bye-laWs, the
same shall be compounded at the following rates provided the
building or part thereof so constructed otherwise conforms to
the provisions contained in the Building Bye-Laws and
ANSAL PROPERTIES v. D.D.A. (KASLIWAL, J.] 479

Master/Zonal Plan regulations. For this party shall have to A
submit the request for building permit in the prescribed pro-
cedure".

Thus under the above provision any building or part thereof con-
structed without obtaining the requisite building permit from the authority
as required under clause 6.1 and 6.7.1 of the building bye-laws will be B
considered as a construction made unauthorisedly and the same can be
compounded at the rates mentioned in clause (B). It is an admitted
position i~ the present case that no building permit has been given to the
appellants till now and as such they are bound to pay the compounding fee
according to the rates prescribed in this regard. Thus we find no force in C
the contention of the appellant that they are not liable to pay any com-
pounding fee.

(iv) So far as charging of interest on the compounding fee is con-
cerned, we are definitely of the view that in the facts and circumstances of
the case the D.D.A. is not entitled to charge any interest on the com- D
, pounding fee.

In the result we find no force in these appeals and we uphold the
order of the High Court except with the modification that the D.D.A. is
not entitled to charge any interest on the amount of compounding fee. It
is further ordered that the directions given by the High Court shall now be E
carried out from the date of the Judgment of this Court instead of the date
of the Judgment of the High Court. Thus except the -abovementioned

- modifications, we uphold the order of the High Court as well as the
directions given by it. There will 1,-e no order as to costs in this Court.

V.P.R. Appeals Partly allowed.