Shahid Karim, J:- The issue at the heart of this constitutional petition is the precise amount of fee to be paid to Lahore Development Authority (LDA) for permanent commercialization of the property situated at Plot No.12, Block C/1, M.M. Alam Road, Gulberg III, Lahore (the property ). The property is in the ownership of the petitioner who has sought permanent commercialization in terms of the Valuation Table 2016-17 read with rule 28of the LDA Land Use Rules, 2014 (Rules, 2014). The parties are on common ground with respect to certain facts and a summary of which will exercise a gravitational pull on the outcome of this petition.
2. The facts can be stated shortly . On 23.02.2017, the petitioner filed an application at the LDA One-Window supported by the relevant documents for the payment of fee for permanent commercialization which at the relevant time was 20% of the value of the property in terms of the valuation table relied upon by LDA for the year 2016-17 and this was based on a notification issued by the Govt. of the Punjab on 25.6.2016 whereby a property rate list was published. The petitioner 's case, according to the learned counsel, is covered by S.No.40 and which prescribes the rate at which the petitioner is liable for the payment of commercialization fee that comes to Rs.25,50,000/- per marla. A letter was written by LDA on 20.03.2017 requiring the petitioner to submit ownership documents issued by LDA for further process of the case. In the meantime on 25.5.2017 the petitioner deposited a pay order for Rs.10,00,000/- as an advance on the payment of commercialization fee which cheque has been encashed by LDA. On 26.5.2017 the petitioner filed the requisite documents. Since then LDA has not issued the demand notice for the payment of commercialization fee. Various letters were exchanged subsequent to the filing of property documents on 26.5.2017 and the fact remains that a demand notice has not been issued to this date by LDA. Therefore on its part, the petitioner 's case is that it has completed the formal ities on 26.5.2017 and LDA was obliged to issue a demand notice soon thereafter for the payment of the commercialization fee at the rate list which was notified on 25.6.2016.
3. LDA relies on the enumeration in paragraph 9 of its reply . It would be approp riate to reproduce the excerpts which are as under: "Not denied to the extent of submission of application of the petitioner. Rest of para is denied being incorrect.
Though the petitioner filed application on 23.2.2017 but the application was incomplete as he had not attached the ownership documents issued by LDA. The petitioner was advised vide letter No.LDA/ TP/C/6617 dated 20.03.2017 to submit the ownership documents issued by LDA for further processing of his case (Copy attached as Annex-A). The petitioner deposited a pay order for Rs.10,00,000/- on 25.5.2017 as advance payment for commercialization fee which was encashed by LDA. The petitioner after delay of 02-months filed application vide OWO application No.2442932 dated 26.05.2017 and provided the requisite documents (Copy attached as Annex-B). It is however, significant to mention here that during this delay on part of petitioner, an amendment in LDA Land Use Rules 2014 was approved by the Government of Punjab through Secretary HUD & PHE Department and was notified on 5.5.2017 vide No.SO(H-II) 3-2/2016 (Copy attached as Annex-C). As per this amendment, Accordingly, rule 34 sub clause (2) of LDA Land Use Rules 2014 was amended and following was substituted in its place: "(2) the concerned authority shall not entertain an application for construction, re-construction or alteration of building, plot or land in a notified land use under the re-classification scheme or on road mentioned in list-A or permissible use in different land use classes, unless the petitioner has paid the fee accordance with the rules as applicable on the date of issuance of demand notice or conversion fee.."
4. From the reply adumbrated, it can be seen that the primary facts are not in dispute and the making of the application, submission of the documents pursuant to the demand raised by LDA on 26.5.2017 and the making of part payment are common grounds betwe en the parties. However , LDA relies upon an amendment brought about in rule 34 sub-clause (2) of the Rules, 2014 (the amended rule 34) which has been reproduced above and on this basis it is the case of LDA that the rule having been promulgated on 5.5.2017 (by a notification) the petitioner is obliged to remit the fee at the rate specified vide notification dated 29.6.2017. There is no contention between the parties that the valuation table relied upon by LDA was to take effect from 01.07.2017. Thus doubtless the application was made by the petitioner prior to the promulgation of the amended rule 34. The only point of divergence is that the submission of documents was made on 26.5.2017 and the rules had already been notified on 5.5.2017. Therefore the central question that engages this Court is whether the amendment in the Rules, 2014 relied upon by LDA applies to the case of the petitioner and whether the amendmen t can be used as a ruse to deny the remittance of the conversion fee by the petitioner at the valuation list relating to 2016-17.
5. Rule 28 of the Rules, 2014 prescribes the fee for conversion of land use. It provides that: "28. Fee for conversion of land use.--(1) Conversion of land use, by preparation, amendment in the master plan, by declaration of peri-urban area under the Lahore Development Authority Master Plan Rules 2014, and by reclassification under Lahore Development Authority Land Use (Classification, Reclassification and Redevelopment) Rules 2009, Punjab Land Use (Classification, Reclassification and Redevelopment) Rules 2009 or under these rules, shall not entitle any person to use the land for such notified, converted, reclassified use unless the conversion fee is paid in a manner given hereinafter ."
6. Simply put, rule 28 merely states that the conversion of land use by re-classification shall not be automatic and will not entitle a person to use his land for such notified, converted, reclassified use unless the conversion fee is paid in a manner given hereinafter. Thus what is required to be done by a person seeking to use the land for a reclassified use is to make the payment of conversion fee to LDA on the basis of the valuation table and the rates mentioned in rule 28 itself. It is an undisputed fact that the petitioner has been making use of the land property in question on commercial basis and was granted temporary commercialization prior to the promulgation of the Rules, 2014 and subsequent to Rules, 2014 and their enforcement the petitioner continued to use the property for commercial use. It has been brought forth in the petition itself that a payment of rupees one million was made by the petitioner on 24.5.2017 by a pay order drawn at Askari Bank Ltd. Mall Road Branch which was encashed by LDA. This payment was clearly made for the conversion fee which the petitioner was obliged to pay under rule 28 of Rules, 2014. There is no rebuttal to the assertion that the documents of title of the petitioner had already been submitted to LDA and were in the record since 2015. There is also no requirement in Rules, 2014 that a person applying for conversion should submit the title documents along with application as required by LDA. Thus the letter written by LDA on 20.03.2017 was not in furtherance of a procedural formality prescribed by law and a bounden duty to be fulfilled by the petitioner. Moreover an interesting aspect of that letter was to submit the ownership documents issued by Lahore Development Authority. Surely those documents were available in the record of LDA since, as per the letter's contents, they had been issued by LDA itself. The ineluctable inference is that the act of requiring those documents was motivated by extraneous considerations.
7. To recapitulate, LDA relies upon the amended rule 34 which has been reproduced above. The amendment was brought by the notification dated 5.5.2017 in exercise of the powers conferred under Section 44 of the Act, 1975 and to the extent of sub-clause (2) of rule 34, the only amendment was in the words "fee in accordance with these rules as applicable on the date of issuance of demand notice or conversion fee" in place of the words "fee in accordance with these rules as applicable on the date of submission of the application".
Thus, the only difference in the amended and un-amended version of sub-clause (2) is that the payment of fee shall be in accordance with the rules as applicable on the date of the issuance of demand notice or conversion fee. However, the word "rules" would mean the Rules of 2014 and the payment of fee in accordance with the rules merely means in accordance with the rule 28 which prescribes the payment of conversion fee in terms of the rates mentioned therein. In most cases, the rate of fee is determined by the valuation table and which, according to the definition clause, means the valuation table notified in the Stamp Act, 1899. I have no doubt in my mind that sub- clause (2) of rule 34 is not happily worded and the amendment which has been enacted by the notification of 5.5.2017 has merely added to the complication. However , the effect of the amendment merely is that those rates would apply which are mentioned in the valuation table applicable on the date of demand notice or conversion fee.
While making the amendment, the first part of sub-clause (2) has remained unchanged. In my opinion, the question in the instant petition turns on the first part of sub-clause (2) and not the issuance of the demand notice or conversion fee. For, in a given case LDA acting unreasonably and irrationally might chose to withhold the issuance of the demand notice. The present is a paradigmatic example of abuse of discretion by LDA and that discretion being exercised whimsically and unfairly as LDA has not issued a demand notice or a challan to this day while having accepted part payment towards the conversion fee. Thus hypothetically LDA in terms of rule 34, may withhold the issuance of the demand notice or challan at its whims and decide that the demand notice shall be issued on the rates in terms of the valuation table for the year 2020-21 which will be far higher than the rates applicable at the time of the application made by the petitioner . This cannot be countenanced and certainly cannot be the intention of the legislature so as to clothe LDA with unbridled power .
8. Although the amendment was made in the last part of sub-clause (2) the first part of the sub-clause remained unaltered. The first part enacts that "the concerned authority shall not entertain an application for construction, re-construction or alteration of a building, plot or land in a notified land use under reclassification scheme ...." Thus, we will have to analyse the true construction of rule 34(2) in order to see whether the petitioner was liable for the payment of one or the other rate of conversion fee.
9. A proper construction of sub-clause (2) would mean that if an application is filed by a person seeking the conversion of land use, LDA will not entertain such an application unless the conversion fee is paid in accordance with the valuation table. For the purpose, LDA will necessarily have to issue a demand notice and a challan to be paid by that person, for LDA is barred from entertaining an application unless the conversion fee is paid. As explicated, it is a play on words and in my opinion a sleight of hand to say that the payment of fee shall be in accordance with the rules as applicable on the date of issuance of demand notice. A holistic reading of sub-clause
(2) would ineluctably bring forth the intention of the legislature that there is a prohib ition on LDA from "entertaining" such an application and this prohibition can be culled out by the use of the words "shall not" in sub-clause (2).This interpretation would assist in preventing LDA from making a fetish of sub-clause (2) as also it will help the discretion to be circumscribed and structured. Therefore, doubtless the issuance of demand notice or challan should precede the receiving of the application, its scrutiny and approval. This construction of rule 34 (2) also comports with the essence of Rules, 2014 which are concerned with land use re-classification and the selection of the project area. Once the re classification has been done, a notification is issued in terms of rule 34 and thereafter any person seeking the conversion of land use must pay the conversion fee and rule 34 sub-clause
(2) mandates the payment of the conversion fee priorly and the entertainment of the application by LDA can only take place thereafter.
10. Applying the above construction to the case of the petitioner , as soon as the petitioner applied to LDA for seeking conversion of the land use, a demand notice ought to have been issued along with a challan obliging the petitioner to make the payment and which has not been done till today . Had the demand notice been issued on the relevant date of the application of the petitioner , the rates would have been drastically different from the one being demanded by LDA.
11. To reiterate, the only question that begs an answer is whether the petitioner is liable to make the payment of commercialization fee to LDA in terms of the rate list notified under the notification issued on 25.6.2016 or the one issued on 29.6.2017. Prior to that, a reference to a letter written by LDA to the petitioner may be made. That letter too is not denied by LDA and reads as follows: "Reference your application received vide One W indow No.2442932 dated 26.60.2017 on the subject cited above.
It is to inform you that as revised DC rates for the year 2017-18 have not been approved yet. As soon as rates will be available, your case will be processed further ."
12. From a reading of the contents of the letter , reproduced above, it can be seen that reference has been made to the application filed on 26.6.2017, that is, during the period when the rate list for the year 2016-17 was in vogue.
The processing of the petitioner's case was halted on account of the egregious reason that revised DC rates had not been determined for the year 2017-18 and which plainly tends to undermine the right of the petitioner to be treated fairly. It was on this pretext that the petitioner was not issued the demand notice while it should have been done as soon as the application along with the supporting documents had been filed. However, I am convinced in my mind that the application must be taken to have been filed on 23.2.2017 when it was firstly done on the LDA One Window. Thereafter the matter only related to the fulfillment of certain formalities such as the filing of copies of the ownership documents and nothing more. Therefore, the cut off date for the filing of the application must be taken as 23.2.2017. It does not matter whether the formalities took some time to be completed. The rate applicable to the case of the petitioner must be determined on the basis of the date of the application and during which the applicable rate list was that issued vide notification dated 25.6.2016. No rule was cited by LDA which would establish that the petitioner is liable for the payment of conversion fee at the rate to be determined at the whim of LDA. If this were the case then LDA could in its sole discretion continue to withhold to issue the demand notice awaiting the revision in the rates to the detriment and harm of the petitioner or any other applicant. The LDA cannot be permitted to indulge in extraction and exploitation of this kind and to make a mockery of sub-rule (2) of rule 4
13. In paragraph 7 of the reply , it is LDA's own showing that the property was commercialized on annual basis on 27.9.2005 for the use of premises as a restaurant and the annual commercialization fee was paid up till 31.12.2012. A gazette notification was issued on 29.06.201 1 according to which M.M Alam Road, Lahore falls on the approved list of roads where annual commercialization is not permissible anymore and thereafter the Rules, 2014 were issued on 01.04.2014 in terms of which only permanent commercialization could be permitted. Thus, the conversion fee was due as soon as Rules, 2014 were promulgated and LDA ought to have compelled the petitioner to pay that fee for the purposes of permanent commercialization. No material has been placed on record which would show that LDA required the petitioner to convert to permanent commercializ ation in view of the fact that the premises were being used on commercial basis.
Therefore, the arguments of LDA cannot prosper so as to hold the petitioner liable for the payment of conversion fee at the rate specified for 2017-18.
14. In view of the above, this petition is allowed. The act of LDA to demand conversion fee from the petitioner at the rate mentioned in the notification dated 29.06.2017 is held to be ultra vires and without lawful authority . It is directed that LDA shall issue a demand notice to the petitioner based on the rate list for 2016-17 issued vide notification dated 25.6.2016. The demand notice shall be issued to the petitioner within a period of fifteen days and shall be paid by the petitioner .