Neutral Citation No. - 2025:AHC:20876-DB HIGH COURT OF JUDICATURE AT ALLAHABAD (Sl. No. 3053) Court No. - 21 Case :- WRIT - C No. - 19899 of 2018 Petitioner :- M/S Uppal Chadha Hi-Tech Developers Pvt. Ltd. Respondent :- State Of U.P. And 3 Others Counsel for Petitioner :- Amit Negi Counsel for Respondent :- C.S.C.,Suresh C. Dwivedi Hon'ble Manoj Kumar Gupta,J. Hon'ble Anish Kumar Gupta,J. 1. Heard Sri Naveen Sinha, learned Senior Counsel assisted by Sri Nipun Singh for the petitioner, Sri Rajiv Gupta, learned Additional Chief Standing Counsel for respondents no. 1, 2 and 4 and Sri Tarun Agarwal, learned counsel assisted by Sri Tejasvi Mishra for respondent no. 3. 2. By means of the instant petition under Article 226 of the Constitution, the petitioner has prayed for quashing of order dated 14.5.2018 passed by respondent no. 1 under Section 41 of the Uttar Pradesh Urban Planning and Development Act, 1973 (in short 'the Act, 1973') and the recovery certificate dated 22.2.2018 as well as order dated 23.3.2018 passed by respondent no. 3 under Section 28A(1) of the Act, 1973. 3. It appears that the Ghaziabad Development Authority (in short 'GDA') imposed a sum of Rs. 114,26,08,800/- towards conversion charges upon the petitioner-company for converting land use of certain land from agricultural to residential. The petitioner paid Rs. 79,98,26,200/- out of the said amount. According to GDA, there was default on the part of petitioner-company in payment of the remaining amount and for recovery of the remaining amount, a recovery certificate dated 22.2.2018 was issued. However, the petitioner- company despite repeated intimation failed to deposit the same and consequently, the impugned order dated 23.3.2018 was passed under Section 28A(1) of the Act, 1973 for sealing the constructions being made over the subject land. The petitioner-company aggrieved by the said order approached the State Government under Section 41 of the Act, 1973. The State Government decided the issue relating to liability of the petitioner-Company towards payment of conversion charges and rate of interest, if any, payable thereupon by order dated 14.5.2018. Both the aforesaid issues were decided against the petitioner. 4. At the time the writ petition was entertained by a co-ordinate Bench a detailed order dated 31.5.2018 was passed, which is extracted below:- "Heard Mr. Navin Sinha, learned Senior Counsel assisted by Mr. Amit Negi, learned counsel for the petitioners, Mr. M.C. Chaturvedi, learned Senior Counsel assisted by Mr. Suresh C. Dwivedi, learned counsel for respondent No. 3 and Mr. Ramanand Pandey, learned Additional Chief Standing Counsel for respondent Nos. 1, 2 and 4. Counsel appearing for the respondents pray for adjournment beyond the ensuing summer vacation to enable them to file counter affidavits. On the other hand, Mr. Navin Sinha, learned Senior Counsel appearing for the petitioners seeks interim relief as prayed. It is not in dispute that 1,120 apartments/flats constructed by the petitioners have been sealed on 23.3.2018. Mr. Sinha, learned Senior Counsel for the petitioners submits that out of the sealed flats, the petitioners have already created third party rights in 30% of the flats. He submits that the worth of flats together is about Rs. 412 crores as per their market rate. As against this, total liability, according to the respondent-Authority is Rs. 73,60,54,221.00 as per the demand notice dated 22.2.2018. We have heard learned counsel for the parties. Insofar as interim relief is concerned, we are satisfied that till the next date, the following order shall meet the ends of justice: (a) The respondent-Authority shall release 20% of the flats out of the 30% flats in which the petitioners have already created third party rights, within a period of one week from today. The petitioners shall furnish a list of all such flats to the respondent-Authority within three days from today. (b) The petitioners shall deposit the remaining principal amount i.e. Rs. 17,28,82,800.00 with the respondent-Authority on or before 30.6.2018. Thereafter, the petitioners shall on or before 31.10.2018 deposit the amount of interest at the rate of 9% per annum in four equal installments on or before fifteenth of every month. The respondent-Authority shall de-seal 10% of the flats on depositing each installment, starting with the flats in which third party rights have already been created. To secure difference between the amount of interest demanded by the respondent-Authority and the petitioners have agreed to deposit (at the rate of 9% per annum), 40% of the flats shall remain sealed till this writ petition is heard. (c) The respondents shall file their counter affidavits on or before 20.7.2018 with advance copies thereof to the Advocate for the petitioners. It would be open to the petitioners to file their rejoinder affidavit on or before 3.8.2018 with an advance copy thereof to the Advocates appearing for the respondents. Petition to come up for further hearing on 20.8.2018. Till then, we direct the petitioners to pay the due installments in terms of this order without committing any default." 5. It is admitted to GDA that the petitioner has deposited the principal amount in terms of the order dated 31.5.2018 and interest at the rate of 9% per annum in four equal installments within time frame. 6. Sri Navin Sinha, learned Senior Counsel appearing for the petitioner submits that the controversy therefore remains confined to the rate of interest which is chargeable on the principal amount. He submits that the respondents are arbitrarily realizing penal interest at the rate of 19.75% and 15% as is clear from the stand taken in paragraphs 30 and 31 of the counter affidavit. He further submits that the Board Resolutions on which reliance has been placed do not provide for charging interest on the conversion charges but to default in payment of development fee or additional FAR charges. 7. Paragraphs 30 and 31 of the counter affidavit are extracted below:- "30. That the amount which was to be paid by the petitioner on 12.12.2011 was Rs. 34,27,82,600.00. The amount of interest (including penal interest) which was to be paid by the petitioner up to 12.05.2016 i.e. the amount of 53 months including penal interest of 19.75% was Rs. 29,90,06,406.00. That from 13.05.2016 upto 28.02.2018 i.e. 22 months the amount of interest (including penal interest) @ 15% is Rs. 9,42,65,215.00, therefore the total amount due on 28.02.2018 was Rs. 73,60,54,221.00. For kind perusal of this Hon'ble Court a photo state copy of the letter of the Chief Town Planner dated 14.04.2018 is being filed herewith and marked as ANNEXURE C.A. 7 to this counter affidavit. 31. That it is relevant to submit here that at this stage that State Government had issued necessary Land Use Conservation Rules in the year 2014, which were effective from 11.12.2014, wherein rate of interest has been mentioned at 12%. Since the case in hand relates to the year 2011 and as such the Rules of 2014 are not applicable in case of petitioner developer. It is further submitted that in the board meeting dated 02.11.2012 rate of interest was 16.75% and the penal interest was @ 19.75 %. Subsequently in board meeting dated 19.04.2016, a decision was taken wherein the rate of interest was 12% and the penal interest was 15%. For kind perusal of this Hon'ble Court a photo state copy Board Meeting proposal and decision dated 02.11.2012 and 19.04.2016 are being filed herewith and marked as ANNEXURE C.A. 8 to this counter affidavit. 8. Sri Tarun Agarwal, learned counsel for the GDA admits that the Board Resolutions on which reliance has been placed in the counter affidavit do not relate to interest on conversion charges but to default in payment of development fee and additional FAR charges. He fairly submits that rules were framed for the first time by the State Government relating to land use conversion charges in the year 2014 in the name of "The Uttar Pradesh Urban Planning and Development (Assessment, Levy and Collection of Land Use Conversion Charge) Rules, 2014". He places reliance on Rule 6(1) in submitting that simple interest at the rate of 12% per annum could be levied by the Authority on the land use conversion charges. 9. As noted, the controversy remains limited to the rate at which the interest would be charged by GDA on delayed payment of the conversion charges. The conversion charge has been deposited by the petitioner as per the interim order dated 31.5.2018 and within time frame stipulated thereby. 10. Admittedly, there were no rules which governed realization of interest on conversion charges. There was also no agreement between the parties in relation thereto. The Rules as noted above, for the first time, were framed in the year 2014 whereunder simple interest is chargeable at the rate of 12% per annum. We are of the opinion that in such circumstances, at best the GDA could be permitted to charge simple interest at the rate of 12% per annum from the date it became due till the date of actual payment. Sri Navin Sinha, learned Senior Counsel for the petitioner states that the petitioner is ready to pay interest at the said rate. 11. Accordingly, the instant petition stands disposed of by providing that the impugned order and the recovery certificate shall stand modified to the extent that GDA would be entitled to charge simple interest at the rate of 12% per annum from the date it became due till the date of actual payment. The said amount shall be quantified and intimated to the petitioner within two weeks from today and within next two weeks the petitioner shall pay the same. 12. Upon payment of the aforesaid sum, the seal of the remaining flats shall be opened. Order Date :- 13.2.2025 Kirti (Anish Kumar Gupta, J.) (Manoj Kumar Gupta, J.) Digitally signed by :- SMT KIRTI MISHRA High Court of Judicature at Allahabad Digitally signed by :- SMT KIRTI MISHRA High Court of Judicature at Allahabad