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Wednesday, March 25, 2015

Specific Performance of an agreement of Sale - Lease Hold Rights with out permission of DDA can not be sold - but sold under an agreement of sale - General Power of Attorney was also executed - a collusive specific performance of decree was obtained to avoid stamp duty and Registration charges - Despite of direction in the Decree to deposit stamp duty and registration charges not complied - It is a collusive Decree - confers no title on the person who obtained the same - Scheme for conversion of lease hold rights into free hold rights - by the date of commencement of scheme , he is not power of attorney holder - as per latest judgement of Apex court , no transfers can be effected by GPA sales and the same will apply not only to deeds of conveyance in regard to freehold property but also to transfer of leasehold property. A lease can be validly transferred only under a registered assignment of lease. It is time that an end is put to the pernicious practice of SA/GPA/WILL transactions known as GPA sales."- High court order is set aside - The respondent is at liberty to pursue the matter with DDA in accordance with law. Respondent is also at liberty to seek for return of money deposited by him/his father-Lekhraj Kukreja and when such application is made for return of money, the appellant/DDA is directed to return the same with 10% interest. - 2015 S.C. MSK LAW REPORTS

DDA executed perpetual sub-lease deed dated 16.08.1967 in respect  of
the suit property in favour of one    Sh. Jan Talwar (Defendant No.1 in  the
original suit).  Jan Talwar by an agreement to sell dated 10.6.1986,  agreed
to sell the suit property to Mrs. Raymen Kukreja for  a  sale  consideration
of Rs.20,50,000/-.
Jan Talwar, in respect of the same suit  property,  also
executed a General Power of Attorney dated 10.06.1986 in favour of Lekh  Raj
Kukreja-husband of vendee i.e. Mrs. Raymen Kukreja.  
The  cause  of  action
arose in the year 1989, when Jan Talwar refused to execute  the  sale  deed,
even after receiving the complete  sale  consideration.  
This  led  to  the
filing of civil suit being CS (OS) No.2777/1989 for  a  decree  of  specific
performance of the aforesaid agreement to sell.  

Compromise Decree

"There will be a decree for specific  performance  of  the  agreement  dated
10th June, 1986 in favour of Plaintiff No.2 and against  Defendant  No.1  in
respect of property No.N-73, Panchsheel Park,  New  Delhi.   Defendant  No.1
shall arrange to have sale deed executed within a period  of  30  days  from
today.  In case he fails  to  do  so  the  Registrar  of  this  Court  shall
nominate or appoint some official of this Court to  execute  the  sale  deed
for and on behalf of Defendant No.1 and  in  favour  of  Plaintiff  No.2  on
payment of requisite stamp duty  and  registration  charges.   The  official
nominated by the Registrar will be paid a fee of Rs.10,000/-."
Based on the compromise  decree  in  the  original  suit,
Gaurav Kukreja applied to DDA for  the  conversion  of  suit  property  from
leasehold to freehold.
 However, the  DDA  refused  the  conversion  on  the
ground that as per the scheme,   Gaurav  Kukreja  did  not  possess  a  good
Learned Single Judge of High Court of Delhi,  after  considering
material on record allowed the writ petition  by  holding  that  the  decree
passed in the civil suit stands on a higher footing than any  General  Power
of Attorney as per Clause 13(a) of the Conversion  Policy.
 In the suit for specific performance filed by  respondent-Gaurav
Kukreja and his father-Lekh Raj Kukreja, DDA was not made  a  party  to  the
suit despite the fact that it was within their knowledge that  the  property
is a leasehold property under the control of DDA and cannot be  disposed  of
without obtaining a prior permission from the  DDA.   In  terms  of  Section
15(a)  of  the  Specific  Performance  Act  1963,  the  suit  for   specific
performance can be filed by "any party" to the  contract.   In  the  instant
case, suit for specific performance was filed  by  the  respondent  and  his
father who admittedly were not the parties to the agreement to  sell.    Jan
Talwar (vendor),  during the pendency of  suit,  remained  exparte  and  the
suit was decreed in terms of  a  compromise  arrived  between  the  parties,
all   of  whom were family  members.

  In  our  considered  view,  suit  for
specific  performance  is   a   collusive   suit,   where   the   respondent
     and his father used the process of the court to get rid  of  the  stamp
duty, registration charges and unearned increase payable to DDA.

  Instead of complying with the above order of the High Court  and
getting the  sale  deed  executed,  after  making  payment  of  registration
charges and stamp  duty,  the  respondent  applied  for  conversion  of  the
property through Lekh Raj Kukreja (father of the  respondent  and  power  of
attorney holder) and the  same  was  rejected.

A scheme of conversion  from leasehold  system of  land   tenure
into freehold was brought  into force and noticed by  the  Government.   The
relevant clause of the Scheme of Conversion i.e. Clause 13 reads as  under:-

"13.        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 lessee/sub-lessee/allottee  to  alienate  (sell/transfer)  the
b)  Proof is given of the possession  of  the  property  in  favour  of  the
person in whose name conversion is being sought.
c)   Where there are successive  power  of  attorneys,  conversion  will  be
allowed after verifying the factum of possession provided that  the  linkage
of original lessee/sub-lessee/allottee with the last power  of  attorney  is
established and attested copies of power of attorneys are submitted.

In such cases, a surcharge of 331/3% on the conversion fee would be  payable
over and above the normal conversion charges (no unearned increase  will  be

 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  recognised  or
valid mode of transfer of immovable 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 recognised as deeds of title, except to  the  limited  extent
of Section 53-A of the TP Act. Such transactions cannot be  relied  upon  or
made the basis for mutations  in  municipal  or  revenue  records.  What  is
stated above will apply not  only  to  deeds  of  conveyance  in  regard  to
freehold property but also to transfer of leasehold property.  A  lease  can
be validly transferred only under a registered assignment of  lease.  It  is
time  that  an  end  is  put  to  the  pernicious  practice  of  SA/GPA/WILL
transactions known as GPA sales."

On the date of filing of the writ petition, the  respondent  was  neither  a
holder of a power of attorney nor had  any  subsisting  right  in  the  suit
property and while so, the High Court was not  right  in  holding  that  the
respondent is entitled to apply for conversion of the property.  Dehors  the
scheme  of  conversion,  the  respondent  is  not  entitled  to  apply   for
conversion of the property. 
In our considered  view,  the  respondent  does
not fall within the  ambit  of  Clause  13  of  the  Conversion  Scheme  and
therefore the impugned order of the High Court cannot be  sustained  and  is
liable to be set aside and the appeal deserves to be allowed.

 In the result, the impugned order is set aside  and  the  appeal
is allowed.  
The respondent is at liberty to pursue the matter with  DDA  in accordance with law.  
Respondent is also at liberty to seek  for  return  of money deposited by him/his father-Lekhraj Kukreja and when such  application is made for return of money, the appellant/DDA is  directed  to  return  the same with 10% interest.   No order as to costs. - 2015 S.C. msk law reports.

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