High Court slams Chandigarh for imposing ‘misuse charges’ on SCO owners

Saurabh Malik

Chandigarh, July 2

In a major embarrassment for the Union Territory of Chandigarh, the Punjab and Haryana High Court has censured it for complete non-application of mind, administrative apathy and confusion in imposing ‘misuse charges’ on certain SCO owners.

Shop allotted for ‘general trade’

The Bench said a conjoint perusal of notifications clearly showed that conversion charges were not payable as the SCO was allotted for ‘general trade’ and not for any specific category.

The admonition by the Bench of Justices Arun Palli and Vikram Aggarwal came on a petition by Aneet Gill and another petitioner against the Union Territory of Chandigarh and other respondents. Among other things, the petitioners stated that they were owners of an SCO in Sector 36 leased in September 1985 to their ‘predecessors on interest’ for 99 years for ‘general trade’. The building’s first and second floor was rented out to an institute and an academy for conducting coaching classes.

The term ‘general trade’ through an amendment dated May 16, 2002, was substituted by ‘new general trade’, in which the running of computer training centres and academic coaching centres was permitted. As such, the imposition of ‘misuse charges’ on them was illegal and arbitrary in the absence of misuse on their part.

The respondents, on the other hand, stated that running centres for academic purposes fell under ‘high intensity trade’ category. Permission was required to be obtained for conversion of trade. The petitioners were liable to pay misuse charges as the permission was not obtained.

The Bench observed that the floors were used for coaching purposes from July 15, 2005, to August 8, 2006. Thereafter, the alleged misuse was discontinued. The question arising for the court’s consideration was whether using floors for coaching purposes amounted to a ‘misuser’, rendering the petitioners liable to pay the charges.

The Bench added that a conjoint perusal of notifications clearly showed that conversion charges were not payable as the SCO was allotted for ‘general trade’ and not for any specific category. The floors were used for running coaching centres only after the issuance of amendment dated May 16, 2002. As such, permitting academic coaching centres could not be termed as misuse.

It further observed that a similar view was taken by the UT Chief Administrator in November 2007. It was held that the site could not have been resumed since the ‘misuse’ had been allowed by the Chandigarh Administration.

“It is, therefore, clear that the action of the respondents in saddling the petitioner with misuser charges is palpably erroneous and is the result of total non-application of mind and administrative apathy, coupled with the confusion created by the Administration by issuing notifications without actually clearing the air on any subject. The respondents, if we may say so, created a mess not only for themselves, but also for the petitioner and probably for many other similarly situated persons,” the Bench added, while directing the refund of the entire amount paid, along with 6 per cent per annum interest.