Delhi High Court

Kanal Gupta Thr. Natural Guardian ... vs D.D.A. & Ors. on 9 May, 2013

Author: V. K. Jain

*                IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                 Judgment reserved on   : 06.05.2013
                                  Judgment pronounced on : 09.05.2013

+       W.P.(C) 5025/2007

        KANAL GUPTA THR. NATURAL GUARDIAN P.K.GUPTA
                                                     ..... Petitioner
                     Through: Mr.Rajesh Banati, Advocate

                         versus

        D.D.A. & ORS.
                                                     ..... Respondents
                         Through:Mr.Rajiv Bansal, Advocate for
                         respondent/DDA.

        CORAM:
        HON'BLE MR. JUSTICE V.K. JAIN

V.K. JAIN, J.

1. Plot No. B-542, New Friends Colony, New Delhi was sub-leased

by the respondent-DDA to Mr Sudhir Khanna and Mr Raman Khanna.

They entered into an agreement for construction of a building comprising

basement, ground floor, first floor, second floor and third floor on the

above-referred plot. The said agreement stipulated that if the cost of

construction along with interest, etc. and refund of security deposit was

not paid to the builder Suresh Goyal, he shall be deemed to be the owner

of the said property. An agreement to sell was also stated to have been

executed by the sub-lessees of the above-referred plot in favour of the

builder Shri Suresh Goyal. The construction agreement also empowered

the builder to assign the said agreement and/or to sell the said property or

any part thereof to any person. The aforesaid agreement was assigned by

the builder Suresh Goyal in favour of M/s Moolchand Builders, a

partnership firm, in which Shri Suresh Goyal himself was a partner. Vide

an agreement to sell dated 05.8.1988, executed between M/s Moolchand

Builders as the sellers, Shri Sudhir Khanna and Shri Raman Khanna as

the owners through their attorney Shri Tulsi Dass Goyal, Shri Suresh

Goyal as the confirming party and the petitioner Kanal Gupta and his

sister Neha Gupta, both minor acting through their father and natural

guardian Pramod Kumar Gupta, the vendees agreed to purchase the front

portion of the second floor of the aforesaid building for a consideration of

Rs 8,25,000/-. The portion subject matter of the above-referred

agreement to sell was got assessed by the vendees in their name in the

property tax record of MCD and they also obtained separate water and

electricity connection.

2. Vide another agreement to sell dated 23.10.1996 executed between

Ms Suman Thakur, described therein as the vendor, petitioner No. 2 Ms

Meera Anand, described therein as the vendee and Mr Sudhir Khanna and

Mr Raman Khanna through their attorney Shri Tulsi Dass Goyal, the

aforesaid vendee agreed to purchase the first floor flat in the aforesaid

property for a consideration of Rs 34,00,000/-.

3. WP(C) No. 1833/1994 was filed in this Court by New Friends

Colony Cooperative House Building Society Limited complaining misuse

of the properties in New Friends Colony. On filing of the said writ

petition, a survey was conducted by DDA and it was found that property

No. B-542, New Friends Colony was being misused by Rajnish Parthi &

Co. for office purposes. It was also noticed that a number of apartments

had been constructed in the building which had been sold out to different

persons, without taking written permission. A show-cause notice dated

24.08.2000 was then issued to the sub lessees Sudhir Khanna and Mr

Raman Khanna. Since no reply was received by them, a final show cause

notice dated 03.10.2000 was issued to them. Despite service of both the

notices, no reply was received and, therefore, it was assumed that

noticees had nothing to say in the matter. The lease deed was determined

by the Lieutenant Governor of Delhi and the determination of the lease

deed was communicated to the sub-lessees Shri Sudhir Khanna and Shri

Raman Khanna vide letter dated 27.11.2000.

4. Vide letter dated 18.01.2001, DDA referred the matter to the Estate

Officer for taking eviction proceedings in respect of the aforesaid plot.

The Estate Officer issued a notice dated 02.02.2005 to Shri P.K. Gupta,

father of petitioner No. 1 under Section 4(1) of Public Premises (Eviction

of Unauthorized Occupants) Act, 1971, requiring him to produce

evidence in support of his objections to the notice and appear before him

on 25.02.2005. The said notice was responded by Shri P.K. Gupta vide

letter dated 16.02.2006. The petitioners therafter filed this petition

impugning the show cause notice dated 02.02.2005, issued by the Estate

Officer.

5. Clause (II) 15 of the sub-lease deed executed in favour of Sudhir

Khanna and Raman Khanna reads as under:-

(15) The Sub-Lessee shall not without the written consent of the Lessor carry on, or permit to be carried on, on the residential plot or in any building there on any trade or business whatsoever or use the same or permit the same to be used for any purpose other than that of private dwelling or do or suffer to be done therein any act or thing whatsoever which in the opinion of the Lessor may be a nuisance, annoyance or disturbance to the

Lessor, the Lessee and other Sub-Lessees and persons living in the neighbourhood: Provided that, if the Sub-Lessee is desirous of using the said residential plot or the building thereon for a purpose other than that of private dwelling the Lessor may allow such change of user on such terms and conditions, including payment of additional premium and additional rent, as the Lessor may in his absolute discretion determine."

It would thus be seen that the sub-lessees could not have, without

written consent of the lessor, carried on any trade or business nor could

they have permitted to be carried on, any trade or business on the building

constructed by them on plot No. B-542, New Friends Colony which had

been sub-leased to them. In fact, the said property could not have been

used for any purpose other than that of a private dwelling unit, without

prior consent of the lessor. It is not in dispute that a part of the building

constructed on the aforesaid plot was being used for a purpose other than

that of a private dwelling. There is nothing on record to show that use of

that portion for a purpose other than that of a private dwelling was

commenced and continued without permission of the sub-lessees Mr

Sudhir Khanna and Mr Raman Khanna. Neither of them responded to

the show cause notices issued to them by DDA, alleging therein that they

had violated clause II (15) of the sub-lease deed by using or permitting

the said property to be used for a purpose other than that of a private

dwelling. There is nothing on record to indicate that on receipt of the

said show-cause notice, the sub lessees Mr Sudhir Khanna and Mr Raman

Khanna took such steps as were open to them in law to stop the misuse of

the aforesaid property.

6. In case the portion where misuse was detected by DDA had been

let out by the sub-lessees to M/s Rajnish Parthi & Co., they, on receipt of

the said notice, were duty bound to take legal action such as a suit

restraining the said firm M/s Moolchand Builders from using the portion

occupied by them, for a non residential purpose. Therefore, there was a

breach of clause II (15) of the sub lease deed the moment any part of the

building constructed on plot No. B-542, New Friends Colony was put to a

non-residential use and no action was taken by the sub lessees to prevent

such misuse of the building. Clause III of the sub-lease deed, to the

extent it is relevant, provided that in the event of any breach by the sub-

lessee or by any person claiming through or under him, of any of the

covenants or conditions contained in the lease and to be observed or

performed on the part of the sub-lessee, it shall be lawful for the lessor or

the lessee with the prior consent in writing of the lessor, to re-enter upon

and take possession of the residential plot and the buildings and fixtures

thereon and thereupon the sub-lease and everything therein contained

shall cease and determine in respect of the residential plot so re-entered

upon and the sub-lessee shall not be entitled to any compensation

whatsoever nor to the return of any premium paid by him. Therefore, the

lessor was entitled to determine the sub-lease on account of use of a part

of the building for non-residential purpose. Clause IV of the sub-lease

provides that no forfeiture or re-entry shall be effected until the

lessor/lessee has served upon the lessee, a notice in writing specifying the

particular breach complained of and if the breach is capable of remedy,

requiring the sub-lessee to remedy the breach and the sub lessee falls

within reasonable time as may be mentioned in the notice, to remedy the

breach if it is capable of remedy. Since even on receipt of show cause

notices from the DDA, the sub lessees Mr Sudhir Khanna and Mr Raman

Khanna did not take steps to stop the misuse, the determination of the

lease was absolutely in accordance with the terms contained in the sub

lease.

7. It was contended by the learned counsel for the petitioners that the

petitioners having purchased only the front portion of the second floor

and the first floor and there being no misuse in the aforesaid portions, the

sublease of the whole of the building could not have been determined. I,

however, find no merit in this contention. Firstly, there is one sub lease

in respect of the whole of the plot No. B-542, New Friends Colony and

there are no separate sub-leases for each floors in the building constructed

on the plot. Therefore, if a cause has arisen for determination of the sub-

lease, it is the whole of the sub lease which can be determined by the

lessor. Since the plot, on determination of the sub-lease vests in the

lessor, there can be no question of determining the sub-lease qua only that

portion which has been subjected to the misuse. The second reason for

rejecting this contention is that the petitioners have not purchased any

part of the building constructed on plot No. B-542, New Friends Colony,

they having only entered into an agreement to purchase certain portions

of the building. The sale can be made only by executing a proper sale

deed or transfer deed which also needs to be duly registered.

The following view taken by Supreme Court in Suraj Lamp and

Industries Pvt. Ltd. vs. State of Haryana and Anr (2012) 1 SCC 656 is

pertinent in this regard:-

"11. Section 54 of Transfer of Property Act makes it clear that a contract of sale, that is, an agreement of sale does not, of itself, create any interest in or charge on such property.

X X X

13. A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property. The power of attorney is creation of an agency whereby the grantor authorizes the grantee to do the acts specified therein, on behalf of grantor, which when executed will be binding on the grantor as if done by him (see Section 1A and Section 2 of the Powers of Attorney Act, 1882). It is revocable or terminable at any time unless it is made irrevocable in a manner known to law. Even an irrevocable attorney does not have the effect of transferring title to the grantee.

X X X

14. A will is the testament of the testator. It is a posthumous disposition of the estate of the testator directing distribution of his estate upon his death. It is not a transfer inter vivo.

X X X

15. Therefore, a SA/GPA/WILL transaction does not convey any title nor create any interest in an immovable property. The observations by the Delhi High Court, in Asha M. Jain v. Canara Bank: 94 (2001) DLT 841 that the "concept of power of attorney sales have been recognized as a mode of transaction" when dealing with transactions by way of SA/GPA/WILL are unwarranted and not justified, unintended misleading the general public into thinking that SA/GPA/WILL transactions are some kind of a recognized or accepted mode of transfer and that it can be a valid substitute for a sale deed. Such decisions to the extent they

recognize or accept SA/GPA/WILL transactions as concluded transfers, as contrasted from an agreement to transfer, are not good law.

16. We therefore reiterate that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance. Transactions of the nature of 'GPA sales' or 'SA/GPA/WILL transfers' do not convey title and do not amount to transfer, nor can they be recognized or valid mode of transfer of immoveable property. The courts will not treat such transactions as completed or concluded transfers or as conveyances as they neither convey title nor create any interest in an immovable property. They cannot be recognized as deeds of title, except to the limited extent of Section 53A of the Transfer of Property Act."

8. There is yet another reason why challenge to the determination of

the sub-lease at the instance of the petitioners cannot be entertained. The

show-cause notice was issued by DDA only to the sub-lessees Mr Sudhir

Khanna and Mr Raman Khanna. They being the sub-lessees of plots in

question and the transaction with the petitioners having been entered into

without prior permission from the lessor, the petitioners have no legal

right to challenge the determination of the sub-lease granted to Mr Sudhir

Khanna and Mr Raman Khanna. The petitioners have no legal right to

challenge the determination of lease merely because they happen to be

one of the occupants of certain portions of the building, pursuant to an

agreement to sell executed in their favour.

9. It is true that the Estate Officer has issued notice under Section 4 of

Public Premises (Eviction of Unauthorized Occupants) Act, 1971 to Shri

P.K. Gupta, father of petitioner No. 1, but, the cause for issuing the said

show cause notice is determination of the sub-lease by the lessor. No fault

can be found with the notice issued by the Estate Officer, without

challenging the determination of the sub-lease and since no such

challenge can be entertained at the instance of the petitioners, the

challenge to the notice issued by the Estate Officer must necessarily fail.

In any case, on merits also, no exception can be taken to the order

determining the sub-lease on account of misuse of a portion of the

building constructed on the plot subject matter of the sub-lease.

10. During the course of arguments, it was contended by the learned

counsel for the petitioners that under the policy framed by the

Government, they are entitled to conversion of leasehold rights in respect

of the portions purchased by them, into freehold and that they have

already applied to DDA for this purpose. The learned counsel for the

respondents, on the other hand, submitted that even under the policy

notified by the Government in this regard, the petitioners are not entitled

to conversion of the portion occupied by them into freehold.

11. A perusal of the letter dated 12.06.2006, written by Government of

India, Ministry of Urban Development and Poverty Alleviation, New

Delhi to the Chief Secretary, Government of NCT of Delhi, Vice-

Chairman of DDA, the Chairman of NDMC and the Commissioner of

MCD would show that the Government decided to further modify the

scheme which it had earlier modified vide its letter dated 24.06.2003.

The modified scheme, to the extent it is relevant, reads as under:

I. Conversion of Property sold through regular sale deeds:-

In respect of cases where properties are transferred through regular sale deed, conversion into freehold shall now be allowed on payment of conversion fee plus surcharge of 33 1/3% as available to the GPA holders if the cases are otherwise eligible for conversion into freehold as per the scheme and other Govt. dues are paid.

II. Conversion in respect of multi-storeyed buildings:-

Individual flats/floors/shops in multi-storeyed residential complexes and multi-storeyed commercial complexes shall be considered for conversion from leasehold to freehold in cases where the owners have compiled with following conditions:-

(a) Permission had been obtained from the lessor for construction of multi-storeyed group

housing complexes and multi-storeyed commercial complexes;

                 X                           X                 X
                 (f)     When the property is re-entered/lease is

cancelled, any such properties will not be eligible for the conversion unless the re-entry is withdrawn after payment of all dues including all misuse charges and damages charges for unauthorized construction.

The Formula for calculation of the conversion fee in respect of such flats/floors/shops from leasehold to freehold will be notified separately. A centralized list of such properties when conversion to freehold is done shall be maintained in Land Development Office/DDA to avoid future litigation."

Since no regular sale deed has been executed in favour of the

petitioners, their case is not governed by Clause I of the aforesaid

scheme. It would also be seen from a perusal of the scheme that

conversion from leasehold to freehold in respect of the multi-storeyed

residential complexes and multi-storeyed commercial complexes can be

granted only where permission had been obtained from the lessor for

construction of multi-storeyed group housing complexes and multi-

storeyed commercial complexes. It would be further seen that the

properties, lease of which stands cancelled/re-entered are not eligible for

conversion unless re-entry is withdrawn after payment of all dues,

including misuse charges. There is nothing on record to show that the

sub-lessees Mr Sudhir Khanna and Mr Raman Khanna had obtained