LEGAL ISSUE: Whether conversion fees for leasehold to freehold land should be calculated based on the date of application or the date of the final decision when there is an issue of encroachment.
CASE TYPE: Civil Law, Land Conversion
Case Name: State of Odisha & Ors. vs. Bichitrananda Das
Judgment Date: 18 December 2019
Date of the Judgment: 18 December 2019
Citation: Civil Appeal No. 9521 of 2019 (Arising out of SLP(C) No 30220 of 2019)
Judges: Dr. Dhananjaya Y Chandrachud, J and Hrishikesh Roy, J
When should the conversion fee for land be calculated – at the time of application or at the time of the final decision? The Supreme Court of India recently addressed this question in a case involving the conversion of leasehold land to freehold in Odisha. The core issue was whether the applicable date for calculating conversion fees should be the date of application or the date when the final decision was made, especially when allegations of encroachment were involved. The judgment was delivered by a two-judge bench comprising Dr. Dhananjaya Y Chandrachud, J and Hrishikesh Roy, J.
Case Background
On 30 September 1981, the State Government of Odisha granted a 90-year lease for a plot of land to Bichitrananda Das (the respondent) in Bhubaneswar. The land was designated as plot number F/37, measuring 75 feet by 100 feet. On 18 July 2003, the government introduced a scheme allowing the conversion of residential leasehold plots to freehold land within the Bhubaneswar Municipal Corporation area. A key condition of this scheme was that lessees who had encroached upon government land would not be eligible unless they vacated the unauthorized occupation.
On 15 September 2003, the respondent applied for conversion of his leasehold plot to freehold. Following this, on 22 November 2003, a Revenue Inspector reported that the respondent had encroached on government land measuring 60 x 63 feet in front of his plot. The encroachment was described as an “illegible fence and Garden.” The Land Officer directed the respondent to vacate the encroached area on 13 May 2004.
The respondent claimed to have replied to this notice on 19 April 2006, stating that no such encroachment existed, though he admitted he was “told” about a notice asking him to vacate a portion of Government land. The respondent again communicated on 6 August 2008, reiterating that no encroachment existed. On 28 December 2009, the authorities initiated eviction proceedings under Section 4(1) of the Orissa Public Premises (Eviction of Unauthorized Occupants) Act 1972. After further inquiries and site visits, the authorities noted that the encroachment had not been vacated as of 30 June 2010. The respondent continued to deny any encroachment, stating that the area was merely covered with some green plantation. Eventually, on 22 March 2014, the authorities reported that there was no barbed wire fence and only an open plantation, which they did not consider an encroachment. The conversion was finally approved on 5 May 2014, subject to a payment of Rs 13,25,758.
The respondent challenged the conversion fee calculation in a writ petition before the High Court of Orissa, arguing that the fee should be based on the rates prevalent in 2003 when he initially applied. The High Court ruled in favor of the respondent, directing the State to recompute the fees based on the 2003 rates. This decision was then appealed by the State to the Supreme Court.
Timeline
| Date | Event |
|---|---|
| 30 September 1981 | Lease of land granted to the respondent by the State Government. |
| 18 July 2003 | State government formulates a scheme to allow conversion of residential leasehold plots into freehold land. |
| 15 September 2003 | Respondent applies for conversion of leasehold plot to freehold. |
| 22 November 2003 | Revenue Inspector reports encroachment by the respondent. |
| 13 May 2004 | Land Officer directs the respondent to vacate the encroached area. |
| 19 April 2006 | Respondent claims to have replied to the notice, denying the encroachment. |
| 6 August 2008 | Respondent reiterates that no encroachment exists. |
| 28 December 2009 | Eviction proceedings initiated against the respondent under the Orissa Public Premises (Eviction of Unauthorized Occupants) Act 1972. |
| 30 June 2010 | Authorities note that the encroachment had not been vacated. |
| 23 February 2011 | Land Officer reports no barbed wire fencing, but temporary fencing and iron gate. |
| 2 August 2013 | Respondent again seeks conversion to freehold. |
| 2 September 2013 | Respondent directed to file a declaration that he has not fenced the Govt. land. |
| 22 March 2014 | Authorities report no barbed wire fence, and open plantation is not considered an encroachment. |
| 9 April 2014 | Respondent is asked to submit an affidavit that he has not encroached on government land. |
| 21 April 2014 | Respondent submits an affidavit. |
| 5 May 2014 | Conversion of land from leasehold to freehold granted, conditional on payment of Rs 13,25,758. |
| 2015 | Respondent files a writ petition before the High Court of Orissa. |
| 12 January 2018 | High Court directs the State to recompute the conversion fees as on the date of the making of the application on 15 September 2003. |
| 18 December 2019 | Supreme Court allows the appeal, setting aside the High Court’s judgment. |
Arguments
Arguments by the State of Odisha (Appellants):
- The State argued that the conversion fees should be calculated based on the rates applicable on the date when the final decision on the conversion is made, not the date of the initial application.
- They relied on the Supreme Court’s decision in Chennai Metropolitan Development Authority v. Prestige Estates Project Ltd, which held that the submission of an application does not create a vested right for permission.
- The State contended that the respondent had encroached on government land, which was a violation of the policy condition for conversion. The policy stated that “Lessees who have encroached or unauthorisedly occupied government land anywhere within Bhubaneswar municipal corporation limits would not be eligible to be covered under the scheme unless they vacate the unauthorised occupation.”
- The State pointed out that the respondent’s letter dated 6 August 2008, claiming no encroachment, contradicted his earlier letter dated 19 April 2006, which acknowledged being “told” about a notice regarding encroachment, even though he claimed not to have received it.
- The State emphasized that the respondent was required to remove the encroachment before his application could be considered.
Arguments by Bichitrananda Das (Respondent):
- The respondent argued that there was no encroachment on the land. He stated that there was only a plantation outside his leasehold plot, which should not be considered an encroachment.
- He contended that the State took an inordinately long time to consider his application. Therefore, he should not be burdened with increased rates that were payable on the date of the final decision.
- The respondent maintained that the conversion charges should be computed based on the rates prevalent on the date of the application, i.e., 15 September 2003.
- He relied on his letters dated 19 April 2006 and 6 August 2008, where he claimed that no encroachment existed.
Submissions
| Main Submission | Sub-Submissions | Party |
|---|---|---|
| Applicable Date for Conversion Fees | Fees should be based on the date of the final decision. | State of Odisha |
| Applicable Date for Conversion Fees | Fees should be based on the date of the application. | Bichitrananda Das |
| Encroachment | Respondent had encroached on government land, violating policy conditions. | State of Odisha |
| Encroachment | There was no encroachment, only a plantation. | Bichitrananda Das |
| Compliance with Policy | Applicant must comply with policy conditions, including no encroachment. | State of Odisha |
| Delay in Decision | State took an inordinately long time to consider the application. | Bichitrananda Das |
| Vested Right | Submission of application does not create a vested right for permission. | State of Odisha |
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues in a separate section. However, the core issue that was considered by the court was:
- Whether the High Court was correct in directing the State to recompute the conversion charges as on 15 September 2003, the date of the initial application, or whether the conversion charges should be based on the date when a final decision was taken after due verification that there was no encroachment.
Treatment of the Issue by the Court
| Issue | Court’s Decision | Reasoning |
|---|---|---|
| Whether the conversion charges should be calculated as on the date of application or the date of final decision? | The Supreme Court held that the conversion charges should be calculated based on the date of the final decision. | The Court reasoned that the application for conversion must comply with the policy conditions, including the condition that there should be no encroachment. The Court also held that the submission of an application does not create a vested right. |
Authorities
The Supreme Court relied on the following authorities:
| Authority | Court | Legal Point | How it was used by the Court |
|---|---|---|---|
| Chennai Metropolitan Development Authority v. Prestige Estates Project Ltd [2019 SCC OnLine SC 931] | Supreme Court of India | Submission of an application does not create a vested right for permission. | The Court relied on this case to support its view that the respondent did not have a vested right to have his conversion charges calculated as on the date of his application. |
| State of Tamil Nadu v. Hind Stone [(1981) 2 SCC 205] | Supreme Court of India | An application does not create a vested right. | This case was cited to reinforce the principle that an application does not confer a vested right for permission. |
| Howrah Municipal Corporation v. Ganges Rope Co Ltd [(2004) 1 SCC 663] | Supreme Court of India | An application does not create a vested right. | This case was also cited to support the principle that an application does not create a vested right. |
Judgment
How each submission made by the Parties was treated by the Court?
| Submission | How it was treated by the Court |
|---|---|
| The conversion fees should be based on the date of the application. (Respondent’s Submission) | The Court rejected this submission, holding that the fees should be based on the date of the final decision. |
| There was no encroachment, only a plantation. (Respondent’s Submission) | The Court noted that the authorities had initially found an encroachment, and while the nature of the encroachment changed over time, the respondent was required to comply with the policy. |
| The conversion fees should be based on the date of the final decision. (State’s Submission) | The Court accepted this submission, holding that the fees should be based on the date of the final decision, as compliance with the policy was necessary. |
| The applicant must comply with the policy conditions, including no encroachment. (State’s Submission) | The Court agreed with this submission, emphasizing that compliance with the policy was a prerequisite for conversion. |
How each authority was viewed by the Court?
- Chennai Metropolitan Development Authority v. Prestige Estates Project Ltd [2019 SCC OnLine SC 931]*: The Supreme Court relied on this case to support its view that the respondent did not have a vested right to have his conversion charges calculated as on the date of his application.
- State of Tamil Nadu v. Hind Stone [(1981) 2 SCC 205]: This case was cited to reinforce the principle that an application does not confer a vested right for permission.
- Howrah Municipal Corporation v. Ganges Rope Co Ltd [(2004) 1 SCC 663]: This case was also cited to support the principle that an application does not create a vested right.
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the need to ensure compliance with the government’s policy on land conversion. The Court emphasized that the respondent’s application for conversion could only be considered after he had complied with all the conditions of the policy, including the removal of any encroachment. The Court also emphasized that the submission of an application does not create a vested right and that the applicable rate for conversion would be the one prevalent at the time of the final decision.
| Sentiment | Percentage |
|---|---|
| Compliance with Policy | 40% |
| No Vested Right | 30% |
| Factual findings of encroachment | 20% |
| Delay in approaching the Court | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 30% |
| Law | 70% |
Logical Reasoning:
Respondent applies for land conversion
State identifies encroachment
Policy requires removal of encroachment for conversion
Respondent fails to remove encroachment
Conversion can only be considered after compliance
Conversion charges apply as on the date of decision, not application
The Court considered the respondent’s argument that the delay in processing his application should not result in him having to pay increased fees. However, the Court noted that the respondent himself had waited until 2015 to file a writ petition in the High Court. The Court also noted that the respondent had been informed of the encroachment and was required to remove it before his application could be considered. The Court rejected the High Court’s decision that the conversion charges should be based on the date of the application.
The Supreme Court’s reasoning was based on the principle that “the application for conversion from leasehold to freehold must necessarily be consistent with and compliant to the governing provisions of the policy which has been framed by the State government. Unless compliance is effected, there is no right to claim conversion of the land to freehold.” The Court also observed, “The submission of an application does not confer a vested right for permission.” The Court further stated, “The respondent would necessarily have to pay the conversion charges on the date when a final decision was taken after due verification that there was no encroachment and after scrutinizing the declaration which was filed by the respondent.”
Key Takeaways
- Conversion fees for land from leasehold to freehold are calculated based on the rates applicable on the date of the final decision, not the date of the initial application.
- Applicants must comply with all conditions of the applicable policy, including the removal of encroachments, before their applications can be considered.
- Submitting an application does not create a vested right for permission.
- Delays in processing applications do not automatically entitle applicants to have their fees calculated based on earlier rates.
- Applicants should ensure that they comply with all requirements and conditions of the government policy to avoid issues with their applications.
Directions
The Supreme Court directed that if the respondent complies with the directions in the State government’s communication regarding the computed conversion charges and makes the necessary payment, the application should be processed expeditiously to facilitate the grant of conversion of the land from leasehold to freehold.
Specific Amendments Analysis
There was no discussion of any specific amendments in the judgment.
Development of Law
The Supreme Court’s judgment reinforces the principle that compliance with policy conditions is essential for land conversion. It clarifies that the date of the final decision, not the date of the application, is the relevant date for calculating conversion fees. This judgment also reaffirms that the submission of an application does not create a vested right. The ratio decidendi of the case is that the conversion charges should be based on the date when the final decision is taken after due verification that there was no encroachment and after scrutinizing the declaration which was filed by the respondent. This case clarifies the law in relation to calculation of conversion charges when there is an allegation of encroachment.
Conclusion
The Supreme Court allowed the appeal filed by the State of Odisha, setting aside the High Court’s order. The Court held that the conversion fees should be calculated based on the rates applicable on the date of the final decision, not the date of the initial application. The Court emphasized that compliance with the policy conditions, including the removal of encroachments, is necessary for land conversion. The judgment underscores the importance of adhering to government policies and the fact that an application does not create a vested right.
Category
Parent Category: Land Law
Child Categories: Land Conversion, Leasehold to Freehold, Encroachment, Government Policy, Orissa Public Premises (Eviction of Unauthorized Occupants) Act 1972
Parent Category: Orissa Public Premises (Eviction of Unauthorized Occupants) Act 1972
Child Categories: Section 4(1), Orissa Public Premises (Eviction of Unauthorized Occupants) Act 1972
FAQ
Q: What is the main issue in the State of Odisha vs. Bichitrananda Das case?
A: The main issue was whether the conversion fees for land from leasehold to freehold should be calculated based on the date of application or the date of the final decision, especially when there was an allegation of encroachment.
Q: What did the Supreme Court decide about the date for calculating conversion fees?
A: The Supreme Court decided that the conversion fees should be calculated based on the rates applicable on the date of the final decision, not the date of the initial application.
Q: What does the Supreme Court say about encroachment?
A: The Supreme Court held that if there is an encroachment on government land, the applicant must remove it before the conversion can be considered. The Court also stated that the applicant must comply with all the conditions of the policy for conversion.
Q: Does submitting an application for land conversion guarantee approval at the rates applicable on the date of application?
A: No, the Supreme Court clarified that submitting an application does not create a vested right for permission. The conversion is subject to complying with the policy, and the applicable rates are those in effect on the date of the final decision.
Q: What should I do if I have applied for land conversion and there is a delay in the decision?
A: The Supreme Court stated that delays do not automatically entitle applicants to have their fees calculated based on earlier rates. You should ensure that you comply with all policy conditions and seek a decision on your application in a timely manner.