Mr. J.K. Bhartiya And Ors. vs Union Of India (Uoi) And Anr.
2005 Latest Caselaw 1651 Del

JUDGMENT

Pradeep Nandrajog, J.

1. The year 1947 was of momentous events in the history of this country. It was the year of the great divide. The country gained freedom but at a heavy price. It was partitioned. An independent sovereign state, Pakistan was created. As a result of partition there was large scale migration. From the territories which remained in India, muslim population migrated to Pakistan. Hindus who had their homes in the territories which went to Pakistan migrated to India. There was a massive influx of the refugee population across the two borders. In large numbers, the migrant population which moved from Pakistan reached the city of Delhi. The city started expanding in geometrical proportion. Land was required for housing, industrial and commercial use. The Large Scale Acquisition Policy of 1961 was framed in Delhi. The policy envisaged allotment of land at pre-determined rates. The idea was to prevent unplanned growth of the city and provide land at reasonable prices to the migrant population.

2. In 1957 the Delhi Development Act was promulgated. The Act as originally framed, empowered DDA to acquire land and develop the same as per planned development of Delhi. Thereafter, power of DDA to acquire the land was taken away. As amended, at the request of DDA, Central Government would acquire lands and place the same at the disposal of DDA. The Delhi Development Authority (Disposal of Developed Nazul Land) Rules 1981 were framed. By virtue of Section 22 of Delhi Development Act, land which was placed at disposal of DDA was to be utilised by it as per directions of the Central Government. Additionally, utilisation of the land was as per the Nazul Land Rules, 1981.

3. Since land was allotted at pre-determined rates (not on market rates) perpetual leases were executed. The form of the lease was statutorily prescribed by the Nazul Land Rules. All leases had a clause to the effect that in case the perpetual lessee transfers the lease hold rights the Lesser was entitled to recover up to 50% unearned increase in the value of the land. Prior permission had to be taken before transfer.

4. Who likes to be shackled? Much less trade and business. Restrictive covenants are disliked in a free economy. People found a way out to circumvent the restrictive covenant in the perpetual lease deeds. The way out found was to transfer possession of the land to a general attorney who, by virtue of an irrevocable power of attorney was vested with the power to possess the land and utilise the same in whatever manner he felt like, including power to let out the land or building, appropriate the rent with further power to sub-delegate his authority. It was nothing but a sale.

5. Taking cognizance of the ground realities, the Central Government thought that it would be better to regularise what had happened. It decided that while regularising what had happened, coffers of the government be enriched. A scheme of conversion from leasehold system of land tenure into freehold was brought into force and notified by the Government.

6. In a nutshell, as per the scheme, lands held as lease-hold tenure were permitted to be converted into freehold on payment of a levy. This levy was called conversion charges. Inter alia, Clauses 1.16 and 1.17 of the policy stipulated as under:-

1.16 In cases where applications for mutation and substitution is pending with the Lesser, conversion would be allowed only after necessary mutation/sanction has been carried out.

1.17. The conversion shall also be allowed in cases where lessee/sub-lessee/allottee has parted with the possession of the property, provided that:

a) Application for conversion is made by a person holding power of attorney from lessee/sub-lessee to alienate sell/transfer the property.

b) Proof is given of possession of the property in favor of the person whose name conversion is being sought.

In such cases, a surcharge of 33.1/3% on the conversion fee would be payable over and above the one time conversion charges applicable for a regular lessee (No unearned increase would be recoverable).

7. Needless to state, where the original lessee had parted with possession of the land, the power of attorney holder, and where there were successive power of attorneys, the last power of attorney holder was entitled for conversion of the land from leasehold to freehold but on payment of a surcharge being 33.1/3% of the conversion fee.

8. Clause 1.14 of the policy stipulated as under:-

1.14. In case of re-entered properties, conversion would be allowed only when re-entry notice has been withdrawn and the lease restored.

9. Needless to state, purport of Clause 1.14 was to give benefit of the conversion policy to those properties where re-entry was ordered and re-entry notice had been withdrawn.

10. Which properties were re-entered? Obviously those where the Lesser had found that there was a violation of the terms of the perpetual lease and on that ground had canceled the lease. By and large re-entries were ordered where lessee of the land was using the same for a purpose other than the prescribed purpose and secondly in cases where the lessee had, without permission of the Lesser and without paying the unearned increase, parted with possession.

11. The conversion policy permitted conversion of lease hold tenure to freehold where orders for re-entry were passed, but on re-entry being withdrawn. Since the policy did not provide the manner in which re-entry would be withdrawn, necessary clarifications were sought from the Government of India by DDA and in response the Government of India vide a clarificatory order dated 28.4.1994 clarified on the issue. The clarificatory directive of the Government of India dated 28.4.1994 reads as under:-

Sub: Conversion of leasehold rights into freehold

Sir,

I am directed to refer to the correspondence resting with your letter No. 27(7)73-Lab.-Res. dated 28.2.94 on the above cited subject and to say that the matter has been examined further but keeping in view the fact that decision to allow conversion in respect of properties, as have changed hands on the basis of General Power of Attornies, after recovery of surcharge at 1/3rd of the conversion fee, having been taken with the approval of Cabinet to bring such transactions to surface and avoid uncertainty about such transactions as had taken place, it would not be justified to insist on payment of unearned increase in such cases.

2. Further, it is a conscious decision taken with the approval of the Cabinet as clarified earlier also that conversion to freehold should be allowed in such cases after recovery of restoration charges and the surcharge as per the scheme. To deny this benefit would result in giving benefit to the law avoiding citizens who had not reported transactions. Such a situation cannot be justified. Moreover, the course of action suggested by you would not stand to legal scrutiny as advised by the legal experts. Therefore, in allowing conversion no financial loss or undermining the position of the Lesser is involved rather this would result in transparent transactions and help the lease administering authorities and others in Realizing dues.

3. In this regard it may not be out of place to mention that these issues were discussed threadbare in the meeting held in the Ministry and attended by the representatives of the D.D.A. Decisions taken were after due consideration of all facts including decision of the Cabinet in this regard. Hence D.D.A. should not have raised the same issues time and again and go ahead as per guidelines/clarifications issued by the Ministry.

4. You are, therefore, requested to allow conversion in such cases without further delay and avoid harassment to the applicants who had made applications in this regard.

12. From a perusal of para 2 of the clarificatory directive dated 28.4.1994 it is evident that the Government of India took a conscious decision that to deny restoration of the determination leases to those who had reported the transactions to the Government, albeit, after violating the terms of lease deed, vis-a-vis those who had not only violated the terms of the lease deed but had not intimated the violation to the Government would be a case of discrimination. Meaning thereby that the beneficial conversion policy was interpreted by the Government of India to be applicable to even those where re-entry had been ordered.

13. There was yet another problem which was created by the implementing agencies. There were cases where either before or after transferring the land intimation was given to DDA and DDA had determined a 50% unearned increase which was paid. Disputes were pending between the purchasers and DDA in respect of the demand towards unearned increase raised by DDA. Before the disputes got resolved, conversion policy was notified. The implementing agencies were taking a stand that qua these properties, since unearned increase had been determined, before conversion could be allowed, unearned increase had to be paid.

14. On 16.5.1994, yet another clarificatory directive was issued by the Government of India. Inter alia vide Clause 5 of the said clarificatory directive it was clarified as under:-

5. It has already been clarified that in cases where demand has already been raised/is under issue and party applies 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.

15. Based on the clarificatory directives aforesaid dated 28.4.1994 and 16.5.1994, a circular was issued by DDA on 23.6.1995. The same reads as under:-

DELHI DEVELOPMENT AUTHORITY

(CO-ORDINATION BRANCH/LANDS)

95/Cordon/Land Disposal                                                        Dt. 23.6.1995

Sub: Conversion of lease hold tenure of land into free hold to deal with cases connected with sale permission etc.

In pursuance of Government of India, Ministry of Urban Development letter No. 1101017/26/93-LD dated 23.10.1993 and No. J-20011/12/III dated 16.5.1994 regarding conversion of lease hold tenure of land into free hold in cases connected with earlier sale permission etc., the matter has been examined in detail and the following decisions have now been taken to dispose of all such pending cases.

Issues Decisions

(i) Where lessee/sub lessee has applied for sale Permission, but DDA has not conveyed the unearned Increase

(ii) Where lessee/sub-lessee has applied for sale Permission and DDA has conveyed unearned increase, but the same has not been paid.

(i) and (ii) In such cases conversion may be Allowed by treating the earlier Application for sale permission as infructuous/ withdrawn.

(iii)Where lessee/sub-lessee has applied for sale permission and DDA has conveyed unearned increase and the same has been paid in full or partly by the lessee but the sale deed has not been registered.

(iii)The amount of unearned increase/sub-lessee with reference to sale permission would be refundable if the original lessee/sub-lessee has applied for conversion and he/she is in physical possession of the property in question.

(iv) Where all the action as mentioned above have been completed including registration of sale deed.

(iv) Conversion to freehold may be allowed after carrying out mutation with reference to sale deed executed by the lessee and after Realizing prescribed conversion charges.

This issues with the approval of Vice-Chairman, DDA.

(K.C. Saxena) Jt. DIR (CO. ODN) LANDS

16. A bare perusal of DDA's circular dated 23.6.1995 shows that where the lessee had applied for sale permission but DDA had not conveyed the unearned increase or where the lessee was conveyed unearned increase but the same was not paid, application for sale permission was to be treated as infructuous/withdrawn and conversion had to be allowed by the Authority. Further, where the lessee had applied for the sale permission and DDA had conveyed the unearned increase and the same had been paid in full or part but sale deed had not been registered, unearned increase paid with reference to the sale permission had to refunded.

17. Further guidelines were issued by D.D.A. vide office order No. F-4(43)96/Coord. dated 2.8.1996. Clause 6 of the office order dated 2.8.1996 stipulated as under:-

6. In the cases where the property has been re-entered, the re-entry orders will be got revoked from the competent authority on payment of restoration charges of Rs. 100/- per day or Rs. 3,000/- per annum from the date of determination of the lease deed to the date of restoration. No damages in such cases would be recoverable.

18. In respect of properties where re-entry had been ordered on account of misuse or where pursuant to misuse detected proceedings were pending, Government of India took a further policy decision notified on 28.6.1999. Vide Clause 6 of the policy decision dated 28.6.1999, Government of India directed as under:-

(6) MISUSE AND UNAUTHORISED CONSTRUCTION

It has been decided that unauthorised construction or misuse of the building constructed on leased premises ought to be taken care of by NDMC/MCD/DDA etc. under their laws/regulations. Accordingly, the lease administering authorities may permit conversion of all leased properties irrespective of any building violations or use violations that may exist.

In view of the large scale misuse of residential premises and unauthorized construction, DDA and local bodies would take coordinated action to deal with the situation effectively.

2. In view of the above, lease administering authorities are requested to make all efforts to clear the pending cases within the prescribed period of 3 months and take effective steps to deal with the fresh applications that my be received in future. Special drives may be launched to dispose of applications for freehold conversion. The lease administering authorities are requested to give due publicity to the scheme.

3. It is further clarified that these orders will have prospective effect and the cases already decided will not be re-opened.

19. On 26.6.2001 DDA issued another circular. The circular dealt with issue of misuse. The same reads as under:-

No.F.4(43)99.Coordn.                                                  Dated 26.6.2001

CIRCULAR

In partial modification of Circular No. F.4(43)99/Coordn./L.D. dt. 3.2.2000 the clarification to the para No. 3 of the Circular No. F.4(43)99/Coord./L.D. dated 15.7.99 is as follows:

1. All cases of conversion where the past misuse/unauthorized construction was reported or the misuse is continuing are to be processed for conversion.

2. The misuse charges would be payable for the period of misuse from the date of direction of misuse till the date of vacation of misuse or up to 28.6.1999 whichever is earlier.

3. All the applications for conversion which had been rejected on account of misuse/unauthorized construction after 28.6.1999 shall be reopened and processed for conversion after recovering misuse charges as per para (2), if applicable.

4. In cases where conversion applications were received and due to continuing misuse/unauthorised construction leases were determined, all such cases would be restored and conversion allowed after recovering misuse charges as per para (2) if applicable. No restoration charges would be recoverable.

5. Where the conversion has been allowed and misuse/unauthorized construction still continuing the matter shall be referred to the concerned Enforcement Agency for further necessary action.

6. Cases wherein the conversion has already been allowed, misuse charge already paid shall not be reopened.

This issues with the approval of Vice Chairman, DDA.

20. DDA modified its circular dated 26.6.2001 pertaining to misuse which vide Clause 2 restricted the misuse charges recoverable till the date of vacation of misuse or up to 28.6.1999, whichever is earlier. Circular dated 11.8.2003 No. F1(2)2002/AO(R)Misc./Pt./89 was issued. The same reads as under:-

CIRCULAR

The issue of levy of misuse charges was discussed during the course of meeting held in the chamber of Vice Chairman DDA on 17.7.2003 and following decisions were taken.

a) Misuse charges shall henceforth be levied up to date or actual date of closure, whichever is earlier. In such cases in which the lessee GPA has applied for conversion of the property, the misuse charges shall be levied up to the date of receipt of complete application for conversion along with all annexure and documents. It is further clarified that misuse charges will be levied up to the date of receipt of last installment or up to the date of closure whichever is earlier in those cases where it has been preferred by the lessee/GPA to deposit conversion charges in installments.

b) Generally the misuse charges are levied from the date of detection as per the survey report/site report etc. However, in such cases where any proof indicating the misuse of property from an earlier date is available misuse charges will be charged from such earlier date, irrespective of actual date of detection.

c) The demand notice for raising the demand of misuse charges will specifically contain the condition that "if payment is not received within 30 days of issue of said demand letter the outstanding amount will attract interest @ 12.5% p.a.

d) The decision as mentioned above will not be applicable to all such cases where the payment on account of misuse charges pursuant to application for conversion has been received by 17.7.03. All other cases where payment has not been received, revised demand on account of misuse charges may be raised.

21. A perusal of the circular dated 26.6.2001 shows that application for conversion which were rejected on account of misuse were to be re-opened. These properties were eligible for conversion into freehold but on payment of past misuse charges. The misuse charges were to be paid for the period of misuse i.e. from the date of detection of the misuse till the date of vacation of misuse or up to 28.6.1999, whichever was earlier.

22. On 24.6.2003, Government of India issued another clarificatory directive and vide Clause III thereof, in respect of property which were being misused directed as under:-

III. MISUSE AND UNAUTHORISED CONSTRUCTION

As already decided, the unauthorised construction and misuse of the building shall continue to be taken care of by the NDMC/MCD/DDA etc. under their bye laws/regulations. The DDA and the local bodies should take coordinated action to curb violations and unauthorized constructions. Accordingly, the lease administering authorities may permit conversion of all leased properties irrespective of any building violations or use violations that may exist, subject to recovery of misuse charges/damage charges as applicable under the guidelines of the lease administering authorities whether earlier demanded or not.

23. Since the original conversion policy notified on 14.2.1992, vide Clause 1.16 stipulated that where applications for mutation and substitution were pending, conversion could be allowed after necessary mutation/substitution was sanctioned, it was creating a problem because in some cases the lessee had died and his/her heirs had transferred possession under agreement to sell coupled with a power of attorney or had executed gift deeds. In one case a clarification was sought from the Government of India as to how conversion application should be processed. Clarification issued by Government of India on 15.11.2000 is to the following effect:-

Subject: Clarification/amendment in conversion policy from lease hold to free hold-inclusion of gift deed for the purpose.

Sir,

I am directed to refer to your letter No. F2(63)/78/CS/889 dated 25th January, 2000 and 24th March, 2000, on the subject noted above, and to state that Shri H.R. Vaish has requested for conversion of property No. S-29, Panchshila Park, New Delhi from lease hold to free hold in his name on the basis of the gift deed executed by his uncle, Shri S.K. Aggarwal, in his favor, without first getting the property mutated in his name. Basically, the request of Shri Vaish is that the property should be converted into free hold in his name treating him at par with a GPA holder. He is prepared to pay additional conversion fee of 33.1/3% as in the case of GPA holder for getting the property converted into free hold in his favor.

2. The request of Shri Vaish has been examined and it has been noted that with the execution of the registered gift deed, the transaction in regard to the transfer of the property is complete. Therefore, the title of the property stands conveyed to the donee. Hence, the appropriate course open is to mutate the property in favor of Shri Vaish as per the prescribed procedure. Thereafter, he will be entitled to get the property converted into free hold in his name as a lesee.

24. The position which emerges is as under:

(i) Refer para 6 above. Clause 1.17 of the original policy permitted directed conversion in favor of the transferee on the transferee paying surcharge of 33.1/3% on the conversion fee.

(ii) Refer para 8, 11, 12 and 17 above. Clause 1.14 of the original policy read with clarificatory directive dated 28.4.1994 and circular dated 2.8.1996 permit conversion of re-entered properties. Orders of re-entry have to be withdrawn and lease restored on payment of restoration charges of Rs. 100/- per day or Rs. 3,000/- per annum from date of determination of lease till date of restoration.(Note: Para 2 of the clarificatory directive dated 28.4.1994 brings out the rational that to deny benefit in such cases would be discriminatory.)

(iii) Refer para 14, 15 and 16 above. Clarificatory directive dated 16.5.1994 and DDA's circular dated 23.6.1995 require conversion to be effected where (a) sale permission was sought and DDA had not conveyed unearned increase; (b) where sale permission was sought and DDA had conveyed unearned increase but same was not paid; and (c) where sale permission was sought and DDA had conveyed unearned increase and same was paid in full or part but sale deed had not been registered. In all three situations no unearned increase was payable and in case of third situation the unearned increase had to be refunded. The application for sale permission had to be treated as infructuous.

(iv) Refer para 6 and 23 above. Clause 1.16 of the original policy read with clarificatory directive dated 15.11.2000 required mutation to be effected as a matter of right in name of the seller if mutation application was pending so that conversion could proceed ahead in favor of the person in possession and acting under a power of attorney.

(v) Refer para 18, 19, 20 and 21 above. Even in cases of misuse and unauthorised constructions, on payment of misuse charges from date of detection till misuse was stopped, conversion has to be allowed.

25. It is evident that the conversion policy, as modified and clarified from time to time, has an onward march. Liberalization is the ethos. Break the shackles - is the signature tune. Let the market forces have an unhindered flow.

26. Facts of the two cases may now be noted. Firstly, I may note the facts of WP(C) 4590-95/04. Vide a perpetual sub-lease dated 10.12.1973, Smt. Bimla Khanna was granted perpetual leasehold rights in respect of plot bearing number D-1087, New Friends Colony, New Delhi. Needless to state the perpetual sub-lease deed contained the covenant that Bimla Khanna could not sell the land or part with its possession without the prior consent of the Lesser and on consent being granted she was to pay up to 50% of the unearned increase in the market value of the plot.

27. Smt. Shiela Devi Bhartiya took possession of the plot under an agreement to sell dated 2.4.1981. She paid full sale consideration to Bimla Khanna. The usual documents, will and power of attorney were also obtained. Notice of transfer was furnished to DDA. On 24.5.1982, DDA intimated Shiela Devi Bhartiya as under:-

Subject:- Plot No. 1087, Block D in New Friends CHBS Limited.

...

Madam,

With reference to your letter dt. Nil on the above subject, I am directed to inform you that your request for transfer of plot No. 1087 in your name has been acceded to.

The society would be advised to make necessary changes in their records.

28. On 14.4.1986, DDA wrote to Shiela Devi Bhartiya informing her that on review, it was observed that the mutation was allowed in contravention of clause II(6)(a)(b) of the sub-lease deed and, therefore, the same has been suspended till further orders. It was followed by another letter dated 8.5.1986 where under DDA informed Shiela Devi Bhartiya that it was decided by DDA to restore the mutation subject to payment of 50% of the unearned increase in the market value of the land. Sum of Rs. 4,84,168.05 was intimated as the amount payable. She was called upon to deposit the said sum within 30 days.

29. Shiela Devi Bhartiya filed a civil suit challenging the suspension and revocation of the mutation.

30. During the pendency of the suit, the scheme of conversion from leasehold tenure to freehold was promulgated by the Government of India in April, 1992. Shiela Devi Bhartiya applied under the scheme and sought conversion in respect of the plot. She paid a sum of Rs. 6,54,500/- towards conversion charges including surcharge of 33.1/3%. Conversion was not processed by DDA because unearned increase was not paid. Whereas DDA wrote letters demanding unearned increase in sum of Rs. 4,84,168.05 together with interest thereon @ 18%, Shiela Devi Bhartiya insisted that as per the conversion policy, she was not to pay any unearned increase. Stalemate continued till 15.8.1999 when Shiela Devi expired.

31. She left behind a will dated 10.6.1999. Beneficiaries under the will were her two daughters-in-law Mrs. Meena Bhartiya and Mrs. Pooja Bhartiya. Relying upon the will which was an undisputed document, as husband of Shiela Devi Bhartiya, her two sons and her daughter accepted the will. There were no other natural heirs.

32. On 5.1.2001, DDA determined the sub-lease due to non-payment of 50% unearned increase in the value of the land. Orders were passed to re-enter the property. Vide letter dated 18.1.2001, petitioners represented against cancellation of the lease.

33. Thinking that peace could be bought, on 30.3.2001, the two daughters-in-law deposited a sum of Rs. 4,84,168/- towards the demand of unearned increase. DDA demanded interest. The present petition was filed praying that in view of the conversion policy and as modified/clarified from time to time, the two daughters-in-law were entitled to a conversion in their favor and DDA be directed to refund the sum of Rs. 4,84,168/- deposited towards unearned increase. Petitioners of the writ petition are the husband, two sons, daughter and the two daughters-in-law of Shiela Devi.

34. Facts of WP(C) 911-12/05 are that late Sh. Munshi Ram acquired perpetual leasehold rights in respect of property number D-5, Maharani Bagh, New Delhi. These rights were acquired under a perpetual sub-lease deed dated 17.4.1965. Needless to state the perpetual sub-lease deed contained the covenant prohibiting Munshi Ram from selling the land or parting with its possession save and except with the prior permission of the Lesser. If permission was granted, Lesser was entitled to recover 50% of the unearned increase in the market value of the land.

35. Munshi Ram entered into a collaboration agreement with M/s Mahabir Export & Import Co. Pvt. Ltd. for construction of a building.

36. Munshi Ram expired on 21.3.1974. There was a dispute between the legal heirs of Munshi Ram, namely his son Sh. Mahesh Chand and wife of Munshi Ram, Smt. Santra Devi as one group and M/s Mahabir Export & Import Co. Pvt. Ltd. as the other group. Arbitration proceedings were resorted to as the collaboration agreement contained an arbitration clause.

37. Disputes were settled and an application under Order 23 Rule 1 and 2 read with Section 151 CPC was filed for recording the compromise in Suit No. 514A/1974 Santra Devi and Anr. v. Mahabir Export and Import Co. Pvt. Ltd.

38. Petitioners were stated to be the nominees of the company under the settlement. The leasehold rights in the plot and ownership rights in the superstructure were assigned to the petitioners under the compromise. They were to pay Rs. 60,329/- to Santra Devi and Mahesh Chand.

39. The suit was disposed of recording the compromise. Petitioners paid the sum of Rs. 60,329/- to Santra Devi and Mahesh Chand on 8.10.1976.

40. Petitioners calculated the unearned increase payable and in response to amnesty offer published by DDA in newspapers as per which transfers which had taken place without consent of DDA could be regularised on the transferee paying 50% of the unearned increase less 15% rebate. The offer was open till 30.6.1989. Petitioners took benefit of the amnesty offer and deposited Rs. 18,35,646/- towards 50% of the unearned increase after availing rebate of 15%.

41. Unfortunately, DDA did not mutate the property in the name of the petitioners. Formal document of conveyance was not executed. In the meanwhile, acting under the conversion policy, petitioners applied and paid the conversion charges on 23.12.1999.

42. From the record it is not clear whether petitioners paid the surcharge or not.

43. On 13.7.2000, DDA wrote to the petitioners that till mutation was effected, conversion would not be allowed.

44. Present petition was filed praying that DDA be directed to convert the leasehold tenure to freehold and refund Rs. 18,35,646/- deposited by the petitioners towards unearned increase.

45. In view of the legal position crystalized in para 24 of the present judgment, the petitions have to succeed. Needless to state, the conversion policy, as modified, permits direct conversion in favor of the transferee provided surcharge of 33.1/3% on the conversion fee is paid. Clause 1.14 of the conversion policy as modified by clause 6 of the circular dated 2.8.1996 requires determined leases to be restored and re-entry withdrawn on payment of restoration charges in sum of Rs. 100/- per day or Rs. 3000/- per annum from the date of determination of the lease deed till date of restoration. Further, DDA's circular dated 23.6.1995 requires conversion to be effected even in cases where pursuant to sale permission being sought and DDA conveying unearned increase, and same being paid in full or part but sale deed not being executed. On payment of the conversion fee and the surcharge conversion has to be allowed in all such cases. The circular clearly states that in such cases the unearned increase has to be refunded.

46. On the issue of mutation, needless to state, the policy as modified, treats mutation as a mere formality and same has to be allowed as a matter of course. In this connection the Government of India's clarificatory letter dated 15.11.2000, noted in para 23 above clinches the issue.

47. Though, the various facets of the conversion policy as clarified and modified from time to time have been culled out by me as above in para 24, but since precedents always have a value, I may but note a few judgments on the point. In the decision reported as H.R. Vaish v. UOI, S.K. Kaul, J. noting clause 1.16 of the original conversion policy as modified vide DDA's circular dated 23.6.1995 and noting Government of India's clarification issued on 15.11.2000 held:-

15. Thus, once the power of attorney transaction is recognized there can be no question of mutation of the property in such a case since the same is not being insisted upon in case of power of attorney transactions. Thus, clause 1.16 has to be read in the context of the earlier clauses which are cases of normal conversions. The circular relied upon by learned counsel for respondent No. 2 in fact supports the case of the petitioner. The said circular provides that where even sale permissions are sought for and application made for conversion should be entertained treating the application for sale permission as infructuous/withdrawn. Not only this even in cases where unearned increase has been paid, the amount of unearned increase deposited is liable to be refunded.

48. Their Lordships of the Supreme Court in the report published as DDA v. Joginder S. Monga brought out the legal position while comparison the case of Joginder S. Monga vis-a-vis one Rajiv Gupta and Abdul Rasool Virji as under:-

17. The following chart will show that the cases of J.S. Monga and Shri Abdul Rasool Virji stand on a similar footing as that of Rajeev Gupta:

--------------------------------------------------------------------------------------

Sl. No.            Particulars
--------------------------------------------------------------------------------------
J.S. Monga Plot No. A-5/3, Vasant Vihar, New Delhi

Abdul Rasool Virji  Plot No.A-1, Maharani Bagh, New Delhi

Rajeev Gupta  Plot No.4, Palam Marg, Vasant Vihar, New Delhi

1. Date of execution of     13-12-1968           01/01/65               27-4-1971
   sub-lease deed

2. Name of sub-lessee      Shri Mangal Singh Monga and after his
                           death mutation allowed in the joint
                           names of his legal heirs:

   1. Smt Harband Monga (wife)
   2. Smt. Prabha Sehgal (daughter)
   3. Smt. Indira Batra (daughter)
   4. Smt Ella Bajaj (daughter)
   5. Shri Joginder Singh Monga (son)
   6. Shri Mohinder Singh Monga (son)
   7. Shri Jagjit Singh Monga (son)
   8. Shri Upjeet Singh Monga (son)


Shri N.R. Pillai.  After his death mutated in favor of
(1) Shri R.A. Pillai (2) Shri R.S. Pillai.
Mutated on 28-5-1993 (in the names of sons of sub-lessee).
Shri Satish Chander Malhotra.
Transferred on the basis of sale permission,
in favor of Smt. Kaushalya Rani Bhusari, w/o Sampuran Singh,
dated 2-12-1988.

3. Name of purchaser
 1. Shri Rattan Chand Burman
 2. Smt. Brij Rani Burman
    Shri Abdul Rasool Virji
    Shri Rajev Gupta
4. Date of agreement of sale     19-2-1994         16-1-1994         24-10-1993
5. Date on which sale            23-5-1994         17-4-1994         30-4-1994
   permission applied
6. Amount of 50% UEI demanded    Rs.3,62,44,420    Rs.2,23,34,725    Rs.4.13 crores
     dated 22-2-1995   dated 12-6-1996   dated 1-12-1994
7. Date and amount               Dated 16-5-1995   Dated 12-6-1996   Not paid
   of 50% UEI paid               Rs.3,62,44,420    Rs.1,49,72,225

             paid as per the order of the High Court of Delhi dated 22-5-1996

8. Date of execution of
   sale deed/registration
   of the same                  06/06/95          17-1-1997           Not executed
9. Date on which sale
   permission granted/transfer  25-1-1996         30-7-1996           Not granted
   allowed                      (transfer allowed)
10. Date on which conversion
    from leasehold to freehold
    applied                      24-12-1999        24-12-1999         17-12-1999
--------------------------------------------------------------------------------------

  

18. From the aforementioned chart it would appear that not only the application of Rajeev Gupta was contemporaneous, all other relevant facts are almost identical. Rajeev Gupta was to pay a sum of Rs. 4,13,00,000, whereas J.S. Monga and Abdul Rasool Virji were to pay sums of Rs. 3,62,44,420 and Rs. 2,23,34,725 respectively, pursuant to the interim order passed by the high Court. Whereas J.S. Monga deposited the entire amount as demanded, Abdul Rasool Virji deposited a sum of Rs. 1,49,72,225, as per the directions of the High Court.

19. The contention of the learned counsel appearing on behalf of the respondents, therefore, must be held to have some substance that whereas Rajeev Gupta has received the benefit of the purported new policy of conversion from leasehold to freehold, the respondents herein were deprived there from for no fault on their part.

49. The two writ petitions are accordingly allowed as under:-

(i) WP(C) No. 9911-12/05 is disposed of with a direction to DDA to refund sum of Rs. 18,35,646/- to the petitioners within a period of 60 days from date of the present decision, failing which the amount would be paid with interest @ 12% p.a. with effect from 60 days from date of the present decision till date of payment. Mandamus is issued to DDA to convert the leasehold tenure in respect of plot No. D-5, Maharani Bagh, New Delhi into freehold in the names of the petitioners after receiving the conversion charges and surcharge thereon if not already paid. If paid, necessary conveyance deed would be executed on the petitioner's obtaining the proforma of the conveyance deed and paying the requisite stamp duty thereon. Needful would be done within four months from date of the present decision.

(ii) WP(C) 4590-95/04 is disposed of with a direction to DDA to refund a sum of Rs. 4,84,168/- to the petitioners 5 and 6 within a period of 60 days from date of the present decision, failing which the amount would be paid with interest @ 12% p.a. with effect from 60 days from date of the present decision till date of payment. Mandamus is issued to DDA to convert the leasehold tenure in respect of plot No. D-1087, New Friends Colony, New Delhi into freehold in the names of the petitioners 5 and 6 after receiving the conversion charges and surcharge thereon if not already paid, subject to petitioners 5 and 6 paying the restoration charges since the lease has been determined and re-entry has been ordered, which order requires to be undone. Needless to state the quantum of restoration charges would be as per DDA's circular dated 2.8.1996. (It may be noted that Sh. Ravinder Sethi, learned Senior Counsel for the petitioners had consented in this respect that the petitioners 5 and 6 would pay the restoration charges). If paid, necessary conveyance deed would be executed on the petitioners 5 and 6 obtaining the proforma of the conveyance deed and paying the requisite stamp duty thereon.

(iii) Needful would be done within four months from date of the present decision.

No costs.