JUDGMENT S.K. Mahajan, J.
1. Plot No. 143, Sunder Nagar, New Delhi (hereinafter referred to as the property) was agreed to be leased in 1949, perpetually in favor of Smt. Mohinder Kaur, Shri Parshottam Singh and Shri Hargurcharan Singh. Formal agreement to lease was executed on 27.7.1961 by the President of India in favor of the said persons. In accordance with the agreement to lease, the lessees raised a double storey building on the plot of land leased out to them. On 10.5.1978, the lessees entered into an agreement to sell the property in favor of the petitioner. Clause IX of the Agreement to Lease provided that the Lesser shall not prior to obtaining the lease from the President of India under Clause XIV without the consent of the Chief Commissioner, directly or indirectly assign, transfer or otherwise part with any interest in the property. Provided that in the event of sanction being granted, the Lesser shall be entitled to claim and recover a portion of the unearned increase in the value of the land at the time of transfer. The amount to be recovered being 50% of the unearned increase. Lease deed in terms of Clause XIV of the agreement to lease was not executed by the President of India in favor of the lessees. The agreement to sell having been executed by the lessees in favor of the petitioner, an application was made by the lessees on 4.10.1978 for grant of permission to transfer the property in favor of the petitioner. Despite several reminders, no reply was received to the said application made by the lessees for permission to transfer the property in favor of the petitioner and the permission was withheld without assigning any reason. After waiting for considerable period, lessees executed the conveyance deed in favor of the petitioner and got it registered before the Sub-Registrar on 22.6.1979 thereby transferring their right/title and interest in the property in favor of the petitioner. At the time of making the application, the market value of the land, as fixed by the respondent was Rs. 200/- per Sq. yard. It is stated in the writ petition that when the petitioner approached respondent No. 2 about the amount of unearned increase, payable by him for permission to transfer the property in his favor, he was allegedly informed that 50% of the unearned increase would be payable on the prevalent market rate of rent of Rs. 200/- per Sq. Yard and in accordance with the area of the land, he would be liable to pay Rs. 78,740/- as 50% unearned increase of the value of the land. It is submitted that the petitioner acting on this representation made provision for the aforesaid amount of money and got the sale deed executed and registered in his favor only thereafter. Despite the respondent having been informed about the transfer of the property in favor of the petitioner, no action was taken by the respondents either against the lessees or against the petitioner. By a letter dated 19.3.1981, the respondent raised a demand for Rs. 2,52,020/- towards payment of 50% unearned increase in the value of the land and also claimed certain other charges towards regularisation of alleged misuse, etc. Respondent also claimed a sum of Rs. 600/- as the penalty for transfer without permission of the Lesser. This demand dated 19.3.1981 was challenged by the petitioner by filing the present writ petition.
2. During the pendency of the writ petition, the respondents framed a scheme for conversion of the leasehold property into freehold and gave option to the lessees of the properties to apply for said conversion on payment of conversion charges in accordance with the scheme. Provisions were also made in the scheme as well as in the subsequent circulars issued by the respondents for conversion of leasehold property into freehold even in favor of persons who had agreed to purchase the property under an agreement to sell and General Power of Attorney executed in their favor by the original Lesser. On such scheme having come into existence, the petitioner got the writ petition amended and prayed for the following reliefs:
(i) issue a writ of certiorari quashing the demand dated 19.3.1991 for payment of Rs. 2,52,020/- as unearned increase; (ii) issue a writ of mandamus directing respondent Nos.1 and 2 to convert the leasehold rights in respect of property No. 143, Sunder Nagar, New Delhi (Plot No. 143, Block 171, Sunder Nagar, New Delhi), into freehold rights as per the scheme of respondent No. 1 and issue the requisite document of title in favor of the petitioner, in this regard; (iii) In the alternative, if this Hon'ble Court comes to the conclusion that the petitioner is not entitled to prayers (i) and (ii) above - (a) issue a writ of certiorari quashing Annexure-G dated 19.3.1991 to the extent that it demands unearned increase at a rate in excess of Rs. 200/- per Sq. yard as applicable at the time when application for permission to sell was originally made by the lessee; (b) issue a writ or order directing the respondents to charge and accept from the petitioner unearned increase at a rate of Rs. 200/- per Sq. yard applicable on the date when application was made for permission to sell right, title and interest in the property by the lessee to the petitioner; (c) issue a writ, order or direction in the nature of mandamus directing the respondents to execute the perpetual lease deed in favor of the petitioner; (d) issue any other writ, order or direction to the respondents directing them to accept the application of the petitioner for conversion of leasehold rights in property No. 143, Sunder Nagar, New Delhi (Earlier known as Plot No. 143, Block 171, Sunder Nagar, New Delhi), into freehold rights without claiming any interest on the amount of unearned increase, adjudged as payable; 3. In the counter affidavit, the stand taken by the respondent is that the question of processing the case for grant of sale permission could be examined by the respondent only after the receipt of completion certificate as stipulated in the agreement to lease and thereafter intended lessees were required to execute the perpetual lease deed by the President of India as stipulated in Clause IX of the Agreement to lease. It is stated that till the above requirements were completed the intended lessees were restrained from assigning, transferring or otherwise parting with any interest in the said property. The contention, therefore, is that without the perpetual lease deed, the status of the intended lessees was that of a licensee and they had no interest in the land, which they could transfer to the third party. It is also the case of the respondents that though an application was made on 4.10.1978 for grant of permission to sell the property in favor of the petitioner, however, the lessees obtained permission of the competent authority under Section 27(2) of the Urban Land (Ceiling and Regularisation) Act, 1976 only on 30.11.1978 and since prior to the granting of lease, the completion certificate issued by the Municipal Corporation of Delhi in respect of the building constructed on the plot was required to be produced, they were requested on 9.1.1979 to furnish the necessary certificate. It is submitted that since no certificate was furnished, permission could not be granted by the respondents to the petitioner. The respondents have, however, not denied that by letter dated 19.3.1981 they not only granted permission for transfer of property by the lessees to the petitioner but they also claimed 50% unearned increase amounting to Rs. 2,52,020/- being the Government share in the value of the land along with damages, ground rent, etc.. It is not stated in the counter affidavit nor is explained during arguments as to why the said letter was issued if the stand of the respondent was that permission could not be granted without furnishing completion certificate in terms of the Agreement to Lease. It is not denied by learned counsel for the respondent that the unearned increase claimed in the letter dated 19.3.1981 has been claimed taking the value of the land at Rs. 600/- per Sq. yard.
4. After having given my thoughtful consideration to the arguments advanced by learned counsel for the parties, I am of the opinion that after the respondents had issued letter dated 19.3.1981, granting permission to the lessees to transfer the property in favor of the petitioner on payment of 50% unearned increase in the value of the land and on payment of damages for the alleged unauthorised construction and even claiming penalty for transfer without permission of the Lesser, it is not open to the respondents now to contend that no permission could be granted without complying with the provisions of Clause XIV of the Agreement to Lease. Had that been the position, the respondents would not have granted permission vide the letter dated 19.3.1981. This clearly shows that the provisions made in the lease deed for submitting the completion certificate was not mandatory but was only directory. Even if the completion certificate is not produced, the respondents could not withhold the permission only on the ground of non-production of the same as is evident from their letter dated 19.3.1981.
5. It is not denied that the unearned increase claimed in the letter dated 19.3.1981 was on the basis of the market value of the land being taken at Rs. 600/- per Sq. yard. It is also not denied that in 1978 when the lessees had applied for permission to transfer the property in favor of the petitioner, the prevalent land rates were Rs. 200/- per Sq. yard. It is also not in dispute that the land rates were increased from Rs. 200/- per Sq. yard to Rs. 600/- per Sq. yard by a notification issued in 1979 w.e.f. 1st April, 1979. The only question, therefore, to be determined by the Court is whether the land rates, which should be made applicable for computing the unearned increase, are to be taken as they were prevalent on the date of application seeking permission or as on the date when the permission was granted or the property was transferred by execution of the sale deed. This question is no longer res-integra inasmuch as a Division Bench of this Court in Mrs. Neirah Bhargava and another Vs. Lt. Governor of Delhi and Others has held that if there was delay in the grant of permission to sell by the Lesser, the permission when granted must relate back to the date of the application for grant of permission and the unearned increase can be charged on the basis of the cost of the land as it prevailed on the date of the application seeking permission to transfer the property by the lessees. In view of the aforesaid judgment of the Division Bench of this Court, the respondent could not claim the unearned increase on the basis of the market value of the land as it prevailed on the date grant of permission or on the date when sale deed was executed in 1979. The application having been made in 1978 and the agreement to sell having been executed earlier in 1978, the land rates, which have to be taken into consideration must be the rates as were prevalent on the date of the application. As admittedly, the land rates applicable in 1978 were Rs. 200/- per Sq. yard the respondents cannot calculate the unearned increase taking the rate of the land at Rs. 600/- per Sq. yard. I, accordingly, quash the demand made in the letter dated 19.3.1981 insofar as it claims unearned increase of Rs. 2,52,020/- on the basis of the then rate of land of Rs. 600/- per Sq. yard and direct that the petitioner would pay 50% unearned increase taking the rate of land at Rs. 200/- per Sq. yard. Other demands made in the aforesaid letter are maintained.
6. The petitioner will, therefore, pay 50% unearned increase in the value of the land taking the rate of land at Rs. 200/- per Sq. yard along with other damages, etc. mentioned in the letter dated 19.3.1981 within four weeks from the date of this order along with interest @ 9% per annum from the date of the demand till the date of payment to the respondents. Though it is the contention of the petitioner that he is not liable to pay interest as this payment was tendered immediately after the demand was raised, however, interest has been directed to be paid for the reason that the petitioner has utilised the aforesaid money for his own use for the last 22 years and must have earned interest or profits on the same.
7. The next contention of learned counsel for the petitioner is that as during the pendency of the petition the respondents had framed a scheme for conversion of the property from leasehold to freehold, the petitioner is entitled to avail the same and is entitled to the benefits given by Circulars dated May 16, 1994 and July 26, 1995. Circulars dated 16.5.1994 and 26.7.1995 provide that in case of multiple GPAs that the property has changed hands but the last GPA holder has not executed the agreement for sale, conversion to freehold should be allowed in favor of the latest buyer, who is in possession and in whose name the conversion is sought by the latest GPA holder. However, in such cases the point for consideration would be as to what should be the consideration amount for levy of stamp duty and registration charges. As per the Circular, this aspect shall also be decided by the concerned authorities keeping in view the cost prevailing for the similar properties in the locality at the given point of time, when the last GPA was executed and the property was taken possession of. It is also stated in the Circular that in cases where demand has already been raised/is under issue and party applied for conversion, the demand raised earlier would stand withdrawn and conversion allowed to the applicants on payment of conversion fee plus surcharge, if applicable, without insisting on payment of unearned increase. Reliance is also placed on the letter dated 26.7.1995 to contend that in case where evidence is adduced by General Power of Attorney that the amount of unearned increase has been paid by him instead of original lessee/allottee or it has been paid by the prospective buyer, refund to the person who has actually made payment should be allowed. In the process, if possible, a no-objection should be obtained from the lessee/allottee. The submission of learned counsel for the petitioner is that as the conversion charges have already been paid in 1999 along with surcharge, the demand raised by letter dated 19.3.1981 would be deemed to have been withdrawn and the petitioner would be entitled to the conversion of the property from leasehold to freehold in terms of the lease and in terms of the aforesaid two Circulars and he would not be liable to pay unearned increase. Reliance for this has been placed by learned counsel for the petitioner upon the judgment of this Court in CWP NO. 1847/2000 H.R. Vaish Vs. Union of India and others decided on 7th August, 2002 and the judgment in CWP No. 1001/2002 Shanti Swaroop Goyal Vs. Delhi Development Authority and others decided on 19th February, 2003.
8. While the case in H.R. Vaish Vs. Union of India and others was the case of gift where the respondent was claiming 50% unearned increase Along with interest on the value of the land transferred by way of a gift deed, the case in Shanti Swaroop Goyal Vs. Delhi Development Authority and others was the case of sale of property by agreement to sell and General Power of Attorney. None of the two cases, in my view, would be applicable to the facts of the present case inasmuch as the case of the petitioner set up in the petition is that the property already stands transferred in the name of the petitioner by virtue of the sale deed executed by the lessees in his favor. It may be that such sale was not recognised by the respondents because of non-payment of unearned increase as claimed by the respondents by their letter dated 19.3.1981, however, once the property stands transferred in the name of the petitioner by execution of sale deed, which has been duly registered before the sub-Registrar, in my opinion, the petitioner for all intents and purposes had become the owner of the property. It was only a question of the amount of unearned increase, which was liable to be paid by the petitioner. In this view of the matter the judgments, referred to by learned counsel for the petitioner would not be applicable to the facts of the present case and the case of the petitioner for conversion is to be considered on the basis of the scheme, as amended from time to time taking him to be the owner of the property. Petitioner having made an application for conversion from leasehold to freehold and having already allegedly paid the conversion charges, in my opinion, the petitioner's application must be considered by the respondent as expeditiously as possible.
9. I, therefore, direct the respondent-Land and Development Officer to consider the application of the petitioner for conversion from leasehold to freehold and take a decision thereon within three months from the date of this order. While considering the application of the petitioner for conversion from leasehold to freehold, the respondent will take into consideration the fact that for all intents and purposes the petitioner had become the owner of the property as early as in 1978 and they will also take into consideration the deposit which has already been made by the petitioner by way of conversion fee and surcharge in 1999 and excess amount, if any, shall be refunded immediately after the decision. With these observations, the petition stands disposed of.