Case Note & Summary
The State of Odisha appealed against a High Court judgment directing computation of conversion charges for leasehold to freehold at rates prevalent on the date of the respondent's application (15 September 2003) instead of the date of decision (5 May 2014). The respondent, Bichitrananda Das, was granted a 90-year lease in 1981 under the Government Grants Act, 1895. In 2003, the State formulated a scheme allowing conversion of residential leasehold plots to freehold, subject to the condition that lessees who had encroached on government land must vacate such encroachment. The respondent applied for conversion on 15 September 2003. However, a site inspection on 22 November 2003 revealed that he had encroached on 60' x 63' of government land adjacent to his plot by erecting a barbed wire fence and garden. On 13 May 2004, the respondent was directed to vacate the encroachment. The respondent responded belatedly on 6 August 2008, claiming no encroachment existed, but subsequent inspections in 2010 and 2011 confirmed the encroachment persisted, though the barbed wire was removed and only a temporary fence and plantation remained. Eventually, on 5 May 2014, the State allowed conversion upon the respondent submitting an affidavit and paying Rs 13,25,758 as conversion fees computed at 2014 rates. The respondent challenged this, seeking computation at 2003 rates. The High Court allowed the writ petition, directing recomputation at 2003 rates. The Supreme Court reversed, holding that an applicant must comply with policy conditions; no vested right arises on mere application. The delay was attributable to the respondent's failure to vacate the encroachment. Relying on Chennai Metropolitan Development Authority v. Prestige Estates Project Ltd, the Court held that conversion charges are payable at rates prevalent on the date of decision, not application. The appeal was allowed, and the High Court's judgment was set aside.
Headnote
A) Property Law - Leasehold Conversion - Conversion Charges - Government Grants Act, 1895 - The State formulated a scheme for conversion of leasehold to freehold, requiring lessees to vacate encroachments. The respondent applied in 2003 but was found to have encroached. After prolonged correspondence, conversion was allowed in 2014 at then-prevailing rates. The High Court directed computation at 2003 rates. The Supreme Court held that an applicant must comply with policy terms; no vested right arises on mere application. Conversion charges are payable at rates prevalent on the date of decision, not application. (Paras 17-20) B) Administrative Law - Policy Compliance - Condition Precedent - Orissa Public Premises (Eviction of Unauthorized Occupants) Act, 1972, Section 4(1) - The policy required lessees to vacate encroachments before conversion. The respondent was found to have encroached, leading to eviction proceedings. The Court held that the applicant must satisfy all conditions, including removal of encroachment, before being entitled to conversion. The delay in processing was attributable to the respondent's failure to comply. (Paras 17-19) C) Precedent - Vested Right - Application for Permission - Chennai Metropolitan Development Authority v. Prestige Estates Project Ltd, (2019) SCC OnLine SC 931 - The Court relied on this precedent to hold that submission of an application does not confer a vested right for permission. The applicant must comply with the terms of the policy. (Para 17)
Issue of Consideration
Whether conversion charges for leasehold to freehold should be computed as per rates on the date of application or date of decision, when the applicant was alleged to have encroached on government land
Final Decision
Appeal allowed; judgment of the High Court of Orissa dated 12 January 2018 set aside; conversion charges to be computed at rates prevalent on the date of decision (5 May 2014); no order as to costs
Law Points
- Conversion charges for leasehold to freehold are payable at rates prevalent on the date of decision
- not application
- applicant must comply with policy conditions
- no vested right on mere application
