Mrs. Padma Kaul And Ors. vs Delhi Development Authority
2005 Latest Caselaw 1757 Del

JUDGMENT

Mukul Mudgal, J.

Page 2599

1. This writ petition has been filed by the legal heirs of the erstwhile allottee of a plot of land in Kashmiri Cooperative House Building Society numbered as Plot No. 7, Block A, Pamposh Enclave, New Delhi. The petitioners have challenged the demand raised by the respondent/DDA for payment of unearned increase of Rs. 41,06,904/- and Rs. 33,26,592/- as interest thereon for the period 29th September, 1993 till March, 1998.

2. The brief facts of the case as averred by the petitioners through Mr. Sandeep Sethi, Sr. Advocate are as follows:-

(a) The petitioner had sold a plot in question to M/s Matangee Consultants Pvt. Ltd. This transaction has led to the cancellation of the lease of the petitioners by the respondent.

Page 2600

(b) On 23rd June, 1995, a circular was issued by the respondent stating that where a lessee/sub-lessee has applied for sale permission and the DDA had conveyed the unearned increase but the same had not been paid, the conversion could be allowed by treating the earlier application for sale permission as infructuous/withdrawn.

(c) In December, 1999, a scheme was issued by the respondent for conversion of leasehold properties in Delhi to free hold and clause 13 of the said scheme clearly stated that a surcharge of 33.1/3% on the conversion fee will be payable over and above the normal conversion charges and no unearned increase will be recoverable.

(d) The applications for conversion had been made by the petitioners on 23rd December, 1999, 5th March, 2000, 19th October, 2000, 24th May, 2001 and 25th August, 2001.

(e) However, on 16th December, 2002, the respondent sent a letter of demand seeking a sum of Rs. 41,06,904.00 as unearned increase and Rs. 33,26,592.00 as interest thereon with respect to the property in question.

(f) In reply dated 30th December, 2002, the respondents were made aware of the relevant provisions of the circular issued by the respondent in respect of the unearned increase and conversion of properties from leasehold to free hold.

(g) Inspite of the above letter of the petitioners, the respondent by letter dated 4th July, 2003 called upon the petitioner to pay the impugned amount of unearned increase plus interest thereon failing which action was to be taken against the petitioner. The petitioners have sought to rely upon the following decision of the respondent dated 22nd September, 2003:-

"a. In cases where after issue of the sale permission the sale deed has not been executed and the party, i.e. lessee or allottee applies for conversion, the evidence of continued possession of the lessee in the property should be looked into and request for conversion in favor of the allottee/lessee should be allowed. In such cases refund of the amount of unearned increase should also be given.

b. In cases where the property has been re-entered on account of benami transactions or transactions without permission of the Lesser and the party i.e. the general power of attorney applies for conversion after paying the conversion charges plus surcharge as applicable under the scheme, conversion to freehold should be allowed without insisting on payment of unearned increase and on recovery of charges for withdrawal of re-entry as prescribed by the lease administering authority other than payment of unearned increase."

(h) The learned senior counsel for the petitioner has thus submitted that the demand raised by the respondent consequently was illegal as it is contrary to the policy of the respondent as after issue of sale permission, the evidence of continued possession of the lessee in the property was to be looked into and request for conversion in favor of the allottee/lessee should be allowed. In such cases refund of the unearned increase should also be given.

(i) It is further submitted that even though the lease of the petitioner has been determined, the plot in question has not been entered into by the Page 2601 respondent and the possession thereof still vested with the petitioners through their power of attorney holders.

3. The petitioners' case is that their case is fully covered by the judgment of this Court in H.R. Vaish v. Union of India and Ors., reported as . The relevant position of law laid down in the said judgment:-

"14. The aforesaid facts clearly show that in terms of policy for conversion of lease hold into free hold, the concept of power of attorney transactions is recognised and a premium is required to be paid in respect of such transactions to the tune of 33.3%. Clause 1.16 of the said scheme has thus to be understood in that context which requires conversion to be done after mutation. It is relevant to state that the said clause is followed by Clause 1.17 which is as under:-

"1.17. The conversion shall also be allowed in the 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 the lessee/sub-lessee, to alienate (sell/ transfer) the property;

(b) proof is given by posession of the property in favor of the person in whose name conversion is being sought.

15. Thus once the power of attorney transaction is recognised 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 permission are sought for an 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.

16. I am unable to agree with the submission of learned Counsel for DDA that the case of the petitioner would fall in the 4th category which deals with cases where registration on sale deeds has taken place. In such cases mutation in pursuance to the sale deed has to be carried out after Realizing prescribed conversion charges.

17. It is not disputed that in the present case a gift deed has been executed. However, that is not the only document in question. The recorded owner executed a power of attorney in respect of the property in question. This fact is noted in the recorded note discussed above. Thus it cannot be said that the case is one of the merely a gift since it is a case of the gift deed coupled with the power of attorney.

18. It may be noted that normal practice even in case of power of attorney transactions is to execute general attorney of attorney, special power of Page 2602 attorney, agreement to sell and Will. In the present case we have a gift deed and a power of attorney and in my considered view the case of the petitioner would thus fall in the category of a power of attorney transaction."

4. The respondent through Mr. J.M. Sabharwal, Sr. counsel submitted as follows:-

(a) That after the death of the original allottee Shri T.N. Kaul, the property in question bearing No. A-7, Pamposh Enclave was mutated in favor of Smt. Padma Kaul, Shri Gopal Kaul and Shri Brighu Kaul on 1st May, 1989. Thereafter these properties were sold to M/s Matange Consultants (Pvt.) Ltd. on 29th September, 1993. The sale upon being brought to the notice of the DDA, led to the cancellation of the lease as it was clearly in violation of terms of sub-lease between the petitioners and Kashmiri Cooperative Housing Building Society.

(b) When notice to show cause was issued to the petitioners, a stand was taken by the petitioners that the property had never been sold. The stand of the petitioner having been found unsatisfactory and without basis, the sub-lease was determined on 10th September, 1999. Thereafter the petitioners made a representation to the Lt. Governor of Delhi.

(c) In the meanwhile, the Kashmiri Cooperative House Building Society filed Civil Writ Petition No. 3102/1995 in which it was prayed that the DDA must take appropriate action against the petitioner for violating the conditions of the sub-lease.

(d) On 18th November, 1997, this Court recorded the fact that the Lt. Governor of Delhi, upon a representation made by the petitioners, had taken a decision for restoration of the lease subject to the payment of unearned increase. It is submitted that the said order of the Division Bench in the Writ Petition No. 3102/1995 dated 18th November, 1997 has now become final.

(e) That since the condition of payment of unearned increase was a condition precedent for the petitioner for getting restoration of the sub-lease, the petitioner could not challenge the said demand of unearned increase, particularly when the present petitioners were present as respondents No. 5 to 7 in the said writ petition and were fully bound by the judgment dated 18th November, 1997 which judgment was never challenged by the petitioners.

(f) The respondent has also contended that the plea that the unearned increase could not be demanded as per the terms of the circular dated 23rd June, 1995, is without basis as the said circular is not applicable to the present case where the petitioner has sold the property without applying for sale permission contrary to the sub-lease. It is clear that the said circular dated 23rd June, 1995 is applicable only in those cases where sale permission is applied for.

(g) It is finally submitted by the learned senior counsel for the respondent that the conduct of the petitioners disentitles them to the exercise of discretionary relief under Article 226 of the Constitution of India as the stand taken in the present writ petition is that the petitioner has entered into and executed a collaboration and development agreement on 29th September, 1993 with M/s Matangee Consultants (Pvt.) Ltd. and they sold 72.5% of the indivisible land share in the said plot to M/s Matangee Page 2603 Consultants (Pvt.) Ltd. Thus on their own showing the petitioners have taken a diametrically opposite stand contrary to that taken by them in Civil Writ Petition No. 3102/1995 which was that they had not sold the property in question and thus do not deserve the indulgence of this Court in its discretionary jurisdiction under Article 226 of the Constitution.

5. In my view, the plea taken by the respondent is justified. The sine qua non for restoration of the sub-lease is the condition imposed by the Lt. Governor and affirmed by this Court by its judgment dated 18th November, 1997 to the effect that the restoration was subject to payment of unearned increase. Significantly, the petitioners were parties to the said decision and did not challenge such a decision of this Court and indeed could not, because they were in fact beneficiaries of the said decision. Having enjoyed the benefit of the said decision in seeking the restoration of sub-lease, the petitioners are estopped from contending that unearned increase should not be demanded by relying on another circular of the DDA. To permit the petitioners to adopt such a stand would be unjust and inequitable because having availed the benefit of the order of the Lt. Governor affirmed by a judgment of this Court which restored the sub-lease subject to the payment of unearned increase, the petitioner cannot be permitted to turn around and question that part of the judgment which directs them to pay unearned increase. In any event, I am satisfied that in so far as the circular dated 23rd June, 1995 is concerned it was only applicable to those cases, where a sale permission by way of an application had been sought by the lessee/sub-lessee. In the present case, the petitioners themselves did not apply for sale permission but sold the property without the said permission. Hence, the insistence on reliance upon the circular dated 23rd June, 1995 is wholly unjustified. In case the petitioner sought to rely on any other circular prior to the judgment dated 18th November, 1997, such a circular ought to have been brought to the notice of this Court when the judgment dated 18th November, 1997 in CWP No. 3102/95 was delivered. Not having done so, the petitioners cannot now be heard to reap the benefit of that part of the judgment dated 18th November, 1997 which grants them restoration of the property and yet collaterally challenge the condition imposed for the restoration of the plot i.e. payment of unearned increase. In this view of the matter the petitioners cannot rely upon the judgment of the learned Single Judge in H.R. Vaish's case (supra).

6. In my view, the petitioners have taken a plea that they had sold 72.5% of the indivisible land share in the plot in question to M/s Matangee Consultants (Pvt.) Ltd., and earlier had taken a stand on affidavit in Civil Writ petition No. 3102/1995 that no sale has taken place. Such a contradictory stand taken by the petitioners is not justified. In my view the respondents has rightly contended that in any event the conduct of the petitioners evident from the contradictory pleas of the petitioners disentitled them from grant of any discretionary relief under Article 226 of the Constitution. The writ petition is accordingly dismissed with no order as to costs.