Can the Delhi Development Authority impose penalty charges on educational, healthcare and social welfare societies for availing without sanction additional floor area ratio (FAR) in their buildings?
A 2012 notification had specified that no additional FAR charges were to be recovered from societies having income tax exemption.
A Delhi High Court judgment on Tuesday struck down a demand notice seeking penalty charges from Rohini Educational Society. The Court observed that the DDA notice seeking penalty charges of Rs.91.94 lakh was arbitrary, illegal and contrary to the 2012 notification.
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A Division Bench comprising Justice Badar Durrez Ahmed and Justice Siddharth Mridul allowed a writ petition by the Rohini Educational Society while holding that a provision regarding penalty in a 2008 notification on enhanced FAR arising out of the Master Plan of Delhi-2021 did not apply to societies enjoying IT exemption.
The 2008 notification specified that penalty for availing additional FAR without sanction will be 30 per cent over and above the FAR charges. The DDA’s counsel contended that waiving of additional FAR charges from educational societies did not bar levy of separate charges in the form of penalty.
The Court did not agree with the argument and said the penalty, not being a specified gross sum, was dependent on computation of additional FAR charges.
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The DDA, “in all its wisdom and generosity”, took the decision to waive additional FAR charges in case of educational, healthcare and social welfare societies having income tax exemption, it added.
“Once this decision was taken, the logical and obvious corollary is that any penalty imposed for availing such additional FAR charges without sanction and quantified as 30 per cent over and above additional FAR charges will stand waived as well.”
To interpret otherwise will be opposed to the object of granting the benefit at all, it added.