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Friday, April 15, 2016

In the absence of renewal of lease after 10.8.1968, the pleadings of the original lessee that the DDA is estopped from taking the plea that there is no renewal of lease after having accepted the rent after 10.8.1968, in respect of property in question and after accepting certain sums in respect of the same, subsequently, for change of the property in question from leasehold to freehold are all irrelevant aspects for the reason that the same are contrary to the aforesaid provisions of the DD Act, the Nazul Land Rules applicable to the fact situation and the terms and conditions of the lease deed. Further, it is clear from the contents of the termination notice dated 01.09.1972 served upon the original lessee by the DDA that it has not only refused to renew the lease of the property but also asked the original lessee to hand over the possession of the property in question within 30 days, which is absolutely in consonance with Section 5 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971.;Without examining the case in the proper perspective that the property in question being a Public Premises in terms of Section 2(e) of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 and that after expiry of lease period the original lessee has become unauthorized occupant in terms of Section 2(g) of the said Act in the light of relevant statutory provisions and rules referred to supra and law laid down by the Constitution Bench of this Court in the Case of Ashoka Marketing Ltd. & Anr. (supra), the concurrent findings of the courts below on the contentious issue is not only erroneous but also suffers from error in law and therefore, liable to be set aside.; The grant of perpetual injunction by the Trial Court in favour of original lessee, restraining the DDA from taking any action under the said termination notice dated 01.09.1972, on the ground that the termination notice dated 01.09.1972 being illegal, arbitrary and without jurisdiction and the affirmation of the same by both the first appellate court, i.e., by the learned ADJ and further by the High Court by its impugned judgment and order are not only erroneous but also suffers from error in law.; It is well settled position of law that the person having no right, title or interest in the property cannot transfer the same by way of sale deed. Thus, in the instant case, the sale of the property in question by the original lessee in favour of the respondent is not a valid assignment of his right in respect of the same. For the aforesaid reasons, the sale deed is not binding on the DDA.; it has deposited a sum of Rs.96,41,982/- as conversion charges of the property in question from leasehold to freehold right of the same is also of no relevance and lends no support to the respondent for the reason that in the absence of renewal of lease of the property by the DDA, the original lessee himself becomes an unauthorised occupant of the property in question. The deposition of conversion charges in respect of the same to the office of the DDA cannot help the respondent in claiming any right with respect to the property in question. The question whether such a procedure in respect of the public property is permissible in law or not is not required to be decided in this case. - The instant case having peculiar facts and circumstances, namely, after 10.08.1968 the lease stands terminated by efflux of time, which is further evidently clear from the termination notice dated 01.09.1972 and thereafter, the original lessee becomes an unauthorised occupant in terms of Section 2(g) of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 and consequently, not entitled to deal with the property in question in any manner. The very concept of conversion of leasehold rights to freehold rights is not applicable to the fact situation.=The original lessee has been in unauthorised occupation of the property in question for around 30 years (till he executed a sale deed in favour of the respondent) and the respondent has been illegally inducted in possession of the same, by the original lessee, who himself was in unauthorised possession of the property. For around 17 years the respondent has been enjoying the property in question without any right, title or interest. Thus, both are liable to pay the damages for unauthorised occupation and the DDA is empowered under Section 7 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 to claim damages from them. We record this finding in exercise of our appellate power in view of our finding and reasons assigned in this judgment holding that the concurrent finding is not only erroneous but also suffers from error in law in granting decree of permanent injunction in favour of the respondent who is not entitled in law for the same. There is a miscarriage of justice in granting the relief by the courts below in favour of the respondent. Further, keeping in view the public interest involved in this case and particularly having regard to the peculiar facts and circumstances of the case we have to allow this appeal of the DDA. Since we have answered the points framed in this appeal in favour of the appellant-DDA, we further, direct the DDA to take possession of the property immediately without resorting to eviction proceedings, as the respondent has been in unauthorised possession of the property in question, by virtue of erroneous judgments passed by the courts below. The respondent has been unlawfully enjoying the public property which would amount to unlawful enrichment which is against the public interest. For the aforesaid reasons this appeal is allowed, the impugned judgment and decree of the High Court affirming the judgments and decrees of the First Appellate Court and the Trial Court in RCA No. 75 of 1982 and OS No. 47 of 1975 respectively, is hereby set aside. Accordingly, We pass the following order– The DDA is allowed to take the possession of the property in question immediately and dispose of the same in accordance with the provisions of the DD Act read with the relevant Rules in favour of an eligible applicant by conducting public auction, if it intends to dispose of the property. The DDA is entitled for the recovery of damages from both, the original lessee or his legal heirs and the respondent, for the period of their unauthorised occupation of the property at the market rate prevalent in the area. The amount which has been deposited, with the DDA, by the respondent as conversion charges is to be adjusted towards the damages that may be determined by the DDA in accordance with law. The costs of Rs.1 lakh is awarded to the DDA, payable by the respondent for these proceedings.

                                 REPORTABLE
                                                                     IN THE
                           SUPREME COURT OF INDIA
                          CIVIL APPELLATE JURISDICTION

                       CIVIL APPEAL NO.  3783  OF 2016
                  (Arising out of S.L.P. (C) NO.6978 of 2012)

DELHI DEVELOPMENT AUTHORITY           ………… APPELLANT

                                   VERSUS

M/S ANANT RAJ AGENCIES PVT. LTD.      ………… RESPONDENT


                               J U D G M E N T


V. GOPALA GOWDA, J.

      Leave granted.

This appeal by special leave is directed against the impugned  judgment  and
order dated 31.05.2011 passed by the High Court of Delhi  at  New  Delhi  in
RSA No. 6 of 1983, wherein the High Court has dismissed  the  second  appeal
filed by the appellant-Authority (hereinafter  called  “DDA”)  holding  that
acceptance of rent, in the instant case, by the DDA  pursuant  to  a  demand
made by it amounts to a renewal of lease  in  respect  of  the  property  in
question.

Brief facts are stated hereunder to appreciate the rival  legal  contentions
urged on behalf of the parties:
The Delhi Improvement Trust vide lease deed dated 06.01.1951  granted  lease
of plot no.2, Jhandewalan, “E” Block, Delhi in  favour  of  original  lessee
Balraj Virmani. After enactment of the Delhi Development Act, 1957, the  DDA
was constituted by notification of the Central Government and by  virtue  of
Section 60 of the aforesaid  Act,  all  properties,  movable  or  immovable,
vested in the Delhi Improvement Trust came to be vested in the DDA.
The lease in respect of property in question was initially for a  period  of
20 years i.e., w.e.f. 11.08.1948 to 10.08.1968 and the same  was  liable  to
be extended for a further period of 20 years at  the  option  of  lessee  in
accordance with the terms and conditions contained therein. Clause  (vi)  of
the lease deed is a relevant condition, which reads as under:
“vi) not to use the said land and buildings  that  may  be  erected  thereon
during the said term for any other purpose other than  for  the  purpose  of
cold storage plant without the  consent  in  writing  of  the  said  lessor;
provided that the lease shall become void  if  the  land  is  used  for  any
purpose other than that for which the lease is granted not being  a  purpose
subsequently approved by the lessor”.

Clause III(b) is another relevant condition which reads thus:
“III(b) in case this lease with the  lessee  shall  continue  for  the  said
period of 20 years and  provided  the  lessee  has  observed  performed  and
complied  with the terms and covenants, conditions and options to renew  the
lease on such terms and conditions as  the  lessor  deems  fit  for  further
period of 20 years, provided that the notice of the intention of the  lessee
to exercise this option of renewal is given to the lessor six months  before
the expiration of the lease; provided further that if the lease is  extended
for a further period  20 years the lessor shall have the  right  to  enhance
the rental upto 50% at the original rent.”


On 23.02.1967, the original lessee approached the DDA  for  renewal  of  his
lease. The DDA served a show cause notice dated 16.02.1968 to  the  original
lessee for breach of the terms and conditions contained in  the  lease  deed
committed by him with respect to the lease. Following breaches were  pointed
out in the aforesaid show cause notice:
 The mezzanine floor of the said building being used for printing press  and
office purposes by different tenants in contravention of  the  clause  1(vi)
and (vii) of the lease deed.
Cold storage has been sublet to M/s Baikunth cold  storage  since  December,
1965 in contravention of clause 1(vii) of the lease deed.
Portion of mezzanine floor being used for residential purposes by  the  cold
storage staff in contravention of clause 1(xv) of the lease deed.
Only single storey building stands on the plot  in  place  of  four  storied
building in contravention of clause 1(xv)(c) of the lease deed.

By the said notice, 15 days time was given to the original lessee to  remedy
the breaches as pointed out in the show cause notice.  The  original  lessee
replied to the said show cause notice through various  communications  dated
01.03.1968, 26.06.1968 and 01.07.1968.  However,  no  further  communication
was issued by the DDA in this regard.

The DDA vide notice dated 01.09.1972 terminated the lease of the  said  land
on account of non-observation of the terms and conditions contained  in  the
lease deed.

Aggrieved by the decision of the DDA, the  original  lessee  filed  original
suit for perpetual injunction bearing no. 47 of 1975 before  the  Sub-Judge,
Delhi seeking restraining order against the DDA. The learned Sub-Judge  vide
judgment and order dated 07.03.1981 decreed the said suit in favour  of  the
original lessee. The learned Sub-Judge has found notice dated 01.09.1972  of
the DDA to be arbitrary, illegal and without jurisdiction.

Aggrieved by the decision of the learned Sub-Judge, the  DDA  preferred  the
First Appeal vide RCA  No.  75  of  1982  before  the  Court  of  Additional
District Judge (ADJ), Delhi. The learned ADJ vide judgment and  order  dated
29.09.1982 dismissed the appeal and affirmed the judgment and  order  passed
by the trial court.

Aggrieved by the said judgment of the learned ADJ, DDA preferred the  Second
Appeal vide RSA No. 06 of 1983, before  the  High  Court  of  Delhi  at  New
Delhi. During the pendency of the said second appeal an application vide  CM
No. 13336 of 2007  was  moved  under  Order  22  Rule  10  of  the  CPC  for
substitution of M/s Anant Raj Agencies Pvt. Ltd.-the  respondent  herein  in
place of original lessee-Balraj Virmani. In  the  said  application  it  was
urged that the property in question had been  purchased  by  the  respondent
vide sale deed in view of compromise decree dated 22.06.1988 passed  by  the
High Court in terms of  settlement  between  the  original  lessee  and  the
respondent herein.  The High Court vide order dated  03.11.2009  substituted
the respondent in place of the original lessee-Balraj Virmani in the  second
appeal proceedings.

During the pendency of the said RSA No. 6 of 1983,  the  respondent  applied
to DDA for conversion of the said premises from leasehold to  freehold  vide
application  dated  26.03.2004.  The   respondent   deposited   a   sum   of
Rs.96,41,982/- towards conversion charges as per the policy applicable,  but
the request for conversion was rejected by the DDA. Being aggrieved  by  the
said decision, the respondent preferred writ petition being  CWP  No.  10015
of 2005 before the High Court of Delhi praying for directions to  be  issued
to the DDA to consider the request of the respondent  and  grant  conversion
of the said premises from leasehold to  freehold.  The  High  Court  by  its
order dated 19.07.2007 disposed of the said writ petition by  directing  DDA
to decide the matter of conversion within a period  of  8  weeks  after  the
disposal of RSA No. 6 of 1983.

The High Court by its judgment and order dated 31.05.2011 has dismissed  RSA
No. 6 of 1983 filed by the  DDA  holding  that  its  act  of  demanding  and
accepting rent tantamounts to renewal of lease in respect  of  the  property
in question. Hence, this appeal by way of special leave has  been  filed  by
the  DDA  raising  certain  substantial  questions  of  law  urging  various
grounds.

Mr. Ashwani Kumar, the learned  counsel  appearing  on  behalf  of  the  DDA
contended that the High Court has failed to  appreciate  that  the  original
lessee has admittedly breached the terms and  conditions  contained  in  the
lease deed and thus, not entitled to the renewal of the same in his favour.

It was further contended by the learned counsel  that  the  High  Court  has
erred in not appreciating that both  the  courts  below  have  proceeded  on
wrong interpretation of clause III (b) of the lease  deed  dated  06.01.1951
that the lease was unilaterally renewable at the option  of  the  lessee  in
respect of the leased property in favour of the original lessee.

The learned counsel further  contended  that  after  the  admission  of  the
breaches, in respect of terms and conditions  set  out  in  the  lease  deed
referred to supra, by the original lessee as pointed out in the  show  cause
notice dated 16.02.1968, the same was not condoned by the  DDA.  In  such  a
situation it is not right  on  the  part  of  the  trial  court,  the  first
appellate court and the High Court to hold that there was automatic  renewal
of the lease of the property in question only for the reason that  the  rent
was deposited by the lessee in the office of the DDA.

It was further contended by the learned counsel  that  the  High  Court  has
failed to appreciate that the original lessee created  an  interest  in  the
said property, in favour of third party-respondent, during the  period  when
he was no more a lease holder, in respect of the said  property,  by  virtue
of determination of lease in his favour by efflux of  time.  Therefore,  the
original lessee, having no right, title or interest in  the  said  property,
could  not  have  transferred  the  said  property  to  the  respondent  and
therefore, the alleged transfer of the property in question  in  his  favour
is void and the same is not binding upon the DDA.

The learned counsel further contended that the  High  Court  has  failed  to
appreciate that the deposit of the rent  by  the  original  lessee  and  its
acceptance by the office of the DDA is administrative in  nature  and  would
not be construed as an estoppel or waiver of the DDA’s right in  respect  of
the property in question unless a  specific  intention  to  this  effect  is
communicated to the original lessee.

Per contra, Mr. C.S. Vaidyanathan, the learned senior counsel  appearing  on
behalf  of  the  respondent  contended  that  the  present  appeal  is   not
maintainable as the DDA itself has intentionally acquiesced  and  agreed  to
the original lessee’s continued use of the said property  after  the  expiry
of first term of lease on 10.08.1968. It was further submitted that the  DDA
after more than one year of the expiry of the first term of  lease  demanded
rent in respect of the said property vide notice dated 03.10.1969,  pursuant
to which payments towards  rent  were  made  by  the  original  lessee.  The
learned senior counsel further emphasised upon the point  that  the  instant
case differs from those cases where rent is  tendered  by  the  lessee  sans
demand from the lessor. He further submitted that the acceptance of rent  by
the DDA on various occasions pursuant to demand made by it,  clearly  proves
the intention of the DDA  that  the  lease  is  renewed  in  favour  of  the
original lessee.

It was further contended by him that in view of  the  settled  principle  of
law as well as the precedents laid down by this Court in a catena  of  cases
that the exercise of option for renewal cannot be stalled on account of  the
alleged breaches of the terms and conditions of  the  lease  when  no  steps
were taken by the DDA to assert its right and power in respect  of  re-entry
into the  property  in  question  till  the  option  for  renewal  of  lease
exercised by the lessee and therefore, this appeal is  not  maintainable  in
law as no substantial question of  law  arises  for  consideration  of  this
Court in exercise of its appellate jurisdiction. It  was  further  submitted
by him that in the instant case, the DDA  issued  show  cause  notice  dated
16.02.1968 to the original lessee informing him of four  breaches  of  terms
and conditions contained in the lease deed allegedly committed by him.   The
original  lessee  made  detailed   replies   to   the   said   notice   vide
communications dated 01.03.1968, 26.06.1968 and 01.07.1968.  The  DDA  after
receiving the replies from the  original  lessee  neither  communicated  nor
took any action to take the possession  of  the  property  in  question  and
therefore, the conclusion that the DDA was satisfied with the  replies  made
by the original lessee can be safely arrived at.  In  fact,  the  demand  of
rent by the office of the DDA on 03.10.1969 was immediately acceded. It  was
further submitted that in view of the aforesaid it can be  safely  concluded
that after the expiry of the first term of the  lease  and  acquiescence  of
the DDA in letting the original lessee to  continue  in  possession  of  the
said property, the lessee became a tenant at will in  respect  of  the  said
property. Therefore, the impugned judgment and  order  passed  by  the  High
Court is not bad in law and thus, interference by this Court with  the  same
is not warranted.

With respect to the substitution of the respondent in place of the  original
lessee, during pendency of the  second  appeal,  it  was  submitted  by  the
learned senior counsel that the said substitution of party  was  allowed  by
the High Court vide order dated 03.11.2009 in RSA No. 06 of  1983.  The  DDA
did not even file a reply to the application for substitution filed  by  the
respondent and therefore, it is estopped from questioning such  substitution
of the respondent in place of original lessee. It was further  submitted  by
him that the order dated 03.11.2009 has not been challenged by the  DDA  and
therefore, it has no right to raise any new plea  in  this  regard  at  this
stage.

The learned senior counsel further submitted that the DDA  has  deliberately
and intentionally suppressed and concealed material  fact  from  this  Court
i.e., the policy of the DDA for conversion of the  property  from  leasehold
to  freehold  is  under  consideration  and  the  same  is  clear  from  the
communication dated 22.01.2008  sent  by  the  DDA  to  the  respondent.  He
further submitted that admittedly, the DDA has not refunded  the  amount  of
Rs.96,41,982/- deposited by the respondent as conversion charges.

While concluding his contentions the learned senior counsel  submitted  that
the courts below have rightly rejected the case of  the  DDA  while  holding
the notice dated 01.09.1972, whereby it sought to  determine  the  lease  of
the original lessee, arbitrary, illegal and without jurisdiction.  The  High
Court has correctly held that the acceptance of rent by the  office  of  the
DDA, in respect of the said property, pursuant to the  demand  made  by  the
office of the DDA amounts to renewal  of  lease  in  the  instant  case  and
therefore, no interference with the impugned  judgment  and  order  by  this
Court in exercise of its appellate jurisdiction under  Article  136  of  the
Constitution of India is required.

On the basis of the aforesaid rival legal contentions  urged  on  behalf  of
the parties the following points  would  arise  for  consideration  of  this
Court:
Whether the original lessee has  acquired  any  right,  in  respect  of  the
property in question after the termination of lease by  efflux  of  time  on
10.08.1968 and also by termination notice dated 01.09.1972, in  the  absence
of renewal of lease by the DDA in writing as provided  under  Clause  III(b)
of the lease deed, by virtue of payment of rent in the office of the DDA?
Whether the respondent herein acquires any right in respect of  property  in
question by getting substituted in place of the original  lessee  by  virtue
of a compromise decree, between the  original  lessee  and  the  respondent,
based on a sale deed dated 14.10.1998 executed by the  original  lessee,  by
invoking Order 22 Rule 10 of the CPC  during  the  pendency  of  the  appeal
before the High Court?

What order?

      Answer to Point No.1
After careful examination of the material facts and evidence  on  record  it
is clear that on the basis of the admitted facts, the lease of the  property
in question is not renewed by the DDA in favour of the original  lessee,  in
accordance with clause III(b) of the lease deed  dated  06.01.1951.  From  a
reading of the said lease deed it  becomes  very  clear  that  the  original
lease period was initially for a period 20 years, which  period  expired  on
10.08.1968 as the lease period commenced w.e.f. 11.08.1948.  No  doubt,  the
original lessee availed his option of the renewal of lease  as  provided  in
the lease deed by making  a  request  to  the  DDA  vide  his  letter  dated
23.2.1967, but the same was not acceded to by the DDA. Before expiry of  the
original lease  period,  notices  were  issued  by  the  office  of  DDA  on
09.02.1968 and 16.02.1968 to the original lessee alleging  certain  breaches
of the terms and  conditions  (extracted  above)  of  the  lease  deed.  The
original lessee was given 15 days time to remedy the said  breaches.  Though
the original lessee made several replies to the aforesaid  notices  but   he
had failed to rectify the said breaches notified to him. Therefore, the  DDA
vide notice dated 01.09.1972 decided not to renew the lease of the  property
in question and terminated the lease in respect of the same, though  in  law
the same was not even required on the  part  of  the  DDA  in  view  of  the
conditions of the lease deed as after the expiry of the original  period  of
lease it stands terminated by efflux of time.

The  concurrent  findings  recorded  by  the  courts  below  declaring   the
termination notice dated 01.09.1972, terminating the lease of  the  property
in question granted in favour of the original lessee, served by the  DDA  to
the original lessee, as illegal, arbitrary and without jurisdiction  on  the
erroneous assumption of the non-existent fact that there has been a  renewal
of the lease for the  reason  that  the  original  lessee  applied  for  the
renewal of the lease within time as stipulated in the clause III(b)  (supra)
of the lease deed and has been paying rent for the property in  question  to
the office of the DDA. In our view, the said conclusion of the courts  below
is erroneous in law as it is contrary to the Clause III  (b)  of  the  lease
deed and also Sections 21(1) and 22 of the Delhi Development Act, 1957  (for
short the “DD Act”) read with Rule 43 of  the  Delhi  Development  Authority
(Disposal of Developed Nazul Land) Rules, 1981 (for short  the  “Nazul  Land
Rules”). In this regard, it would be necessary for this Court  to  refer  to
the decision relied upon by the learned counsel for the  appellant,  in  the
case of Shanti Prasad Devi & Anr. v. Shankar Mahto &  Ors.[1]  wherein  this
Court, while interpreting Section 116 of the Transfer of Property Act,  1882
with regard to its applicability and the  effect  of  “holding  over”,  held
that it is necessary to obtain assent of the landlord  for  continuation  of
lease after the expiry of lease period and mere acceptance of  rent  by  the
lessor, in absence of agreement  to  the  contrary,  for  subsequent  months
where lessee continues to  occupy  lease  premises  cannot  be  said  to  be
conduct signifying assent on its part. The relevant paras 18 and 19  of  the
case are extracted below :-
“18. We fully agree with the High Court and the first appellate court  below
that on expiry  of  period  of  lease,  mere  acceptance  of  rent  for  the
subsequent months  in  which  the  lessee  continued  to  occupy  the  lease
premises cannot  be  said  to  be  a  conduct  signifying  “assent”  to  the
continuance of the lease even after expiry of lease  period.  To  the  legal
notice seeking renewal of lease, the lessor gave no reply. The agreement  of
renewal contained in clause (7) read with clause (9) required fulfilment  of
two conditions: first, the exercise of  option  of  renewal  by  the  lessee
before the expiry of original period of lease and second, fixation of  terms
and conditions for the renewed period of lease  by  mutual  consent  and  in
absence thereof through the mediation of local  mukhia  or  panchas  of  the
village. The aforesaid renewal clauses (7)  and  (9)  in  the  agreement  of
lease clearly fell within the expression “agreement to  the  contrary”  used
in Section 116 of the Transfer of Property Act. Under the aforesaid  clauses
option to seek renewal was to be exercised before expiry of  the  lease  and
on specified conditions.

19. The lessor in the present  case  had  neither  expressly  nor  impliedly
agreed for renewal. The renewal as provided in  the  original  contract  was
required to be obtained by following a specified procedure i.e. on  mutually
agreed terms or in the alternative through  the  mediation  of  Mukhias  and
Panchas. In the instant case, there is a  renewal  clause  in  the  contract
prescribing a particular period and mode of renewal which was “an  agreement
to the contrary” within the meaning  of  Section  116  of  the  Transfer  of
Property Act. In the face of  specific  clauses  (7)  and  (9)  for  seeking
renewal there could  be  no  implied  renewal  by  “holding  over”  on  mere
acceptance of the rent offered by the lessee. In the  instant  case,  option
of renewal was exercised not in accordance with the terms of renewal  clause
that is before the expiry of lease. It was exercised after expiry  of  lease
and the lessee continued to remain in  use  and  occupation  of  the  leased
premises. The rent offered was accepted by the lessor  for  the  period  the
lessee  overstayed  on  the  leased  premises.  The  lessee,  in  the  above
circumstances, could not claim that  he  was  “holding  over”  as  a  lessee
within the meaning of Section 116 of the Transfer of Property Act.”
     (emphasis supplied by this Court)


To the  same  effect,  the  learned  counsel  has  further,  rightly  placed
reliance on another decision of this Court in the case of Sarup Singh  Gupta
v. S. Jagdish Singh & Ors[2], wherein this Court has held as under :-
“8…In our view, mere acceptance of rent did not by itself constitute an  act
of the nature envisaged by Section 113, Transfer of Property Act showing  an
intention to treat the lease as  subsisting.  The  fact  remains  that  even
after accepting the  rent  tendered,  the  landlord  did  file  a  suit  for
eviction, and even while prosecuting the suit accepted the  rent  which  was
being paid to him by the tenant. It  cannot,  therefore,  be  said  that  by
accepting rent, he intended to waive the notice to quit  and  to  treat  the
lease as subsisting. We cannot ignore the fact that in any  event,  even  if
rent was neither tendered  nor  accepted,  the  landlord  in  the  event  of
success would be entitled to the payment of the arrears of  rent.  To  avoid
any controversy, in the event of termination of lease the practice  followed
by the courts is to permit the landlord to receive  each  month  by  way  of
compensation for the use and occupation of the premises, an amount equal  to
the monthly rent payable by the tenant. It cannot, therefore, be  said  that
mere acceptance of rent amounts to waiver of notice to quit unless there  be
any other evidence to prove or establish that the landlord so intended…”
     (emphasis supplied by this Court)

Further, in the case of Ashoka Marketing Ltd.  &  Anr.  v.  Punjab  National
Bank & Ors[3], wherein  the  question  for  consideration  was  whether  the
provisions of Public Premises  (Eviction  of  Unauthorised  Occupants)  Act,
1971  overrides  the  provisions  of  Delhi  Rent  Control  Act,  1958,  the
Constitution Bench of  this  Court  after  interpretation  of  the  relevant
provisions of both the Acts  has  clearly  held  that  the  Public  Premises
(Eviction of Unauthorised Occupants) Act, 1971 must prevail  over  the  Rent
Control Act. The relevant paras 55 and 70 of the decision read thus:
“55. The Rent Control Act makes a departure from the general law  regulating
the relationship of  landlord  and  tenant  contained  in  the  Transfer  of
Property Act inasmuch as it makes provision for  determination  of  standard
rent, it specifies the grounds on which a landlord can seek the eviction  of
a tenant, it prescribes the  forum  for  adjudication  of  disputes  between
landlords and tenants and the procedure which has to  be  followed  in  such
proceedings. The Rent Control Act can, therefore, be said to  be  a  special
statute regulating the relationship of landlord  and  tenant  in  the  Union
territory of Delhi. The Public Premises Act makes  provision  for  a  speedy
machinery  to  secure  eviction  of  unauthorised  occupants   from   public
premises. As opposed to the general law  which  provides  for  filing  of  a
regular suit for recovery of possession of property  in  a  competent  court
and for trial of such a suit in accordance with the procedure laid  down  in
the Code of Civil Procedure, the Public Premises Act confers  the  power  to
pass an order of eviction of an unauthorised occupant in a  public  premises
on a designated officer and prescribes the procedure to be followed  by  the
said officer before passing such an order. Therefore,  the  Public  Premises
Act  is  also  a  special  statute  relating  to  eviction  of  unauthorised
occupants from  public  premises.  In  other  words,  both  the  enactments,
namely, the Rent Control Act  and  the  Public  Premises  Act,  are  special
statutes in relation to the matters dealt with therein.  Since,  the  Public
Premises Act is a special statute and not a general enactment the  exception
contained in the principle that a subsequent  general  law  cannot  derogate
from an earlier special law cannot be invoked and  in  accordance  with  the
principle that the later laws abrogate earlier  contrary  laws,  the  Public
Premises Act must prevail over the Rent Control Act.

70……In our opinion, the provisions  of  the  Public  Premises  Act,  to  the
extent they cover premises falling within the  ambit  of  the  Rent  Control
Act, override the provisions of  the  Rent  Control  Act  and  a  person  in
unauthorised occupation of public premises under Section  2(e)  of  the  Act
cannot invoke the protection of the Rent Control Act.”

The Transfer of Property Act, 1882 is a general law governing  the  landlord
and the tenant relationship in general. The specific Rent Control  Acts  are
advancement over the  Transfer  of  Property  Act,  thereby  providing  more
protection to the tenant from arbitrary increase of rent and ejectment  from
the rented premises by the landlord. Thus, in the  light  of  the  aforesaid
case law, it can be concluded that the Transfer of  Property  Act,  1882  is
not applicable in respect of the public premises. The property  in  question
is public premises by virtue of Section 2(e)(3)(ii) of the  Public  Premises
(Eviction  of  Unauthorised  Occupants)  Act,  1971,  which  is   reproduced
hereunder:
“2(e) “public premises” means—
(3) in relation to the [National Capital Territory of Delhi]—
(ii) any premises belonging to  the  Delhi  Development  Authority,  whether
such premises are  in  the  possession  of,  or  leased  out  by,  the  said
Authority;….”

Therefore, in the instant case, as per clause III(b) of the lease  deed  and
Sections 21 and 22 of the DD Act read with Rule 43 of the Nazul  Land  Rules
and in the light of  Shanti  Prasad  Devi,  Sarup  Singh  Gupta  and  Ashoka
Marketing Ltd. cases (supra), there cannot be an automatic renewal of  lease
in favour of the original lessee once it  stands  terminated  by  efflux  of
time  and also by issuing notice terminating  the  lease.  Merely  accepting
the amount towards the rent by the office of the DDA  after  expiry  of  the
lease period shall not be construed as renewal of lease of the  premises  in
question, in favour of the original lessee, for another period of  20  years
as contended by the respondent.

Further, the property in question, vested in the DDA, is  a  Nazul  land,  a
developed land as is defined under Rule 2(i) of the Nazul Land Rules,  which
reads thus:
"Nazul land" means the land placed at the  disposal  of  the  Authority  and
developed by or under the control and supervision  of  the  Authority  under
section 22 of the Act”


Section 3(2) of the DD Act says the Authority shall be a body  corporate  by
the name Delhi Development  Authority  (DDA).  Section  21  of  the  DD  Act
empowers the DDA in respect of the disposal of the land and sub-section  (3)
of Section 21 makes it very clear that nothing in the  aforesaid  Act  shall
be construed as enabling the Authority or the local Authority  concerned  to
dispose of the land by way of  gift,  mortgage  or  charge  but  subject  to
certain reference in the DD Act with regard to the disposal  of  land  shall
be construed as reference to the disposal thereof in any manner, whether  by
way of sale, exchange or lease or by  creation  of  any  easement  right  or
privilege or otherwise. Since, the power conferred by the DD  Act  upon  DDA
to grant lease includes renewal of lease  and  in  the  absence  of  such  a
renewal of lease of the property in  question  in  favour  of  the  original
lessee, as required in law, there cannot be  an  automatic  renewal  of  the
same in his favour. The non-grant of renewal  of  lease  in  favour  of  the
original lessee is very clear from the fact that the original lessee  failed
to remedy the breaches pointed out by the DDA  in  its  show  cause  notices
dated 09.02.1968 and  16.02.1968  and  further  made  very  clear  from  the
issuance of  termination  notice  dated  01.09.1972,  whereby  the  DDA  has
conveyed its clear intention of non-renewal of the lease of the property  in
question. The relevant portion of the  aforesaid  termination  notice  reads
thus:
“7. And whereas since you have failed to observe  perform  and  comply  with
the terms and covenant, conditions of the  above  lease  the  said  breaches
still continue. It has been decided not  to  renew  the  lease  for  further
period.”


Thus, it is abundantly clear from the aforesaid legal  statutory  provisions
of the DD Act and terms and conditions of the lease deed and  the  case  law
referred supra that there is no automatic renewal of lease of  the  property
in question in favour of the  original  lessee.  Therefore,  the  concurrent
findings of the courts below  on  the  contentious  issue  in  the  impugned
judgment are not only erroneous but also error in law and  hence,  the  same
cannot be allowed to sustain in law and liable to be set aside.

From the above discussion, it is clear that in the  absence  of  renewal  of
lease, the status of the original lessee, in relation  to  the  property  in
question, is that of  an  unauthorised  occupant  as  he  had  continued  in
occupation of the property in  question  as  an  ‘unauthorized   person’  in
terms of Section 2(g) of the  Public  Premises  (Eviction   of  Unauthorised
Occupants) Act, 1971, which reads as under:
“2(g) “unauthorised occupation”, in relation to any public  premises,  means
the occupation by any person of the public premises  without  authority  for
such occupation, and includes the continuance in occupation  by  any  person
of the public premises after the authority (whether by way of grant  or  any
other mode of transfer) under which he was allowed to  occupy  the  premises
has expired or has been determined for any reason whatsoever.”

In the absence of renewal of lease after 10.8.1968,  the  pleadings  of  the
original lessee that the DDA is estopped from taking the plea that there  is
no renewal of lease after having  accepted  the  rent  after  10.8.1968,  in
respect of property in question and after accepting certain sums in  respect
of the same, subsequently, for change  of  the  property  in  question  from
leasehold to freehold are all irrelevant aspects for  the  reason  that  the
same are contrary to the aforesaid provisions of the DD Act, the Nazul  Land
Rules applicable to the fact situation and the terms and conditions  of  the
lease deed. Further, it is  clear  from  the  contents  of  the  termination
notice dated 01.09.1972 served upon the original lessee by the DDA  that  it
has not only refused to renew the lease of the property but also  asked  the
original lessee to hand over the possession  of  the  property  in  question
within 30 days, which is absolutely in consonance  with  Section  5  of  the
Public Premises (Eviction of Unauthorised Occupants) Act, 1971.

Without examining the case in the proper perspective that  the  property  in
question being a Public Premises in terms of  Section  2(e)  of  the  Public
Premises (Eviction of Unauthorised  Occupants)  Act,  1971  and  that  after
expiry of lease period the original lessee has become unauthorized  occupant
in terms of Section 2(g) of the said Act in the light of relevant  statutory
provisions  and  rules  referred  to  supra  and  law  laid  down   by   the
Constitution Bench of this Court in the Case  of  Ashoka  Marketing  Ltd.  &
Anr.  (supra),  the  concurrent  findings  of  the  courts  below   on   the
contentious issue is not only erroneous but also suffers from error  in  law
and therefore, liable to be set aside.

The grant of perpetual injunction by the Trial Court in favour  of  original
lessee,  restraining  the  DDA  from  taking  any  action  under  the   said
termination notice dated 01.09.1972, on  the  ground  that  the  termination
notice dated 01.09.1972 being illegal, arbitrary  and  without  jurisdiction
and the affirmation of the same by both the first appellate court, i.e.,  by
the learned ADJ and further by the High Court by its impugned  judgment  and
order are not only erroneous but also  suffers  from  error  in  law.  Thus,
Point no.1 is answered in favour of the appellant.


Answer to Point no.2


The  High  Court’s  order  dated  03.11.2009  whereby  the  respondent   was
substituted in place of the original lessee on its application  under  Order
22 Rule 10 of CPC for the reason of execution of sale deed dated  14.10.1998
by the original  lessee  in  favour  of  the  respondent  by  entering  into
compromise between them in Suit No. 601 of 1984 is  also  bad  in  law.  The
sale of the property in question to give effect to the compromise decree  in
aforesaid suit is void ab initio in law for the  reason  that  the  original
lessee, in the absence of renewal of lease in  his  favour  himself  had  no
right, title or interest, at the time of execution of sale deed, in  respect
of the property in question. It is well settled position  of  law  that  the
person having no right, title or interest in the  property  cannot  transfer
the same by way of sale deed. Thus, in the instant case,  the  sale  of  the
property in question by the original lessee in favour of the  respondent  is
not a valid assignment of  his  right  in  respect  of  the  same.  For  the
aforesaid reasons, the sale deed is not binding on the DDA. The  High  Court
has failed to appreciate this important factual  and  legal  aspect  of  the
case.

The contention urged by the learned senior counsel for the  respondent  that
it has deposited a sum  of  Rs.96,41,982/-  as  conversion  charges  of  the
property in question from leasehold to freehold right of the  same  is  also
of no relevance and lends no support to the respondent for the  reason  that
in the absence of renewal of lease of the property by the DDA, the  original
lessee  himself  becomes  an  unauthorised  occupant  of  the  property   in
question. The deposition of conversion charges in respect  of  the  same  to
the office of the DDA cannot help the respondent in claiming any right  with
respect to the property in question. The question whether such  a  procedure
in respect of the public property is  permissible  in  law  or  not  is  not
required to be decided in this case. The instant case having peculiar  facts
and circumstances, namely, after 10.08.1968 the lease stands  terminated  by
efflux of time, which  is  further  evidently  clear  from  the  termination
notice dated 01.09.1972 and  thereafter,  the  original  lessee  becomes  an
unauthorised occupant in terms  of  Section  2(g)  of  the  Public  Premises
(Eviction  of  Unauthorised  Occupants)  Act,  1971  and  consequently,  not
entitled to deal with the property in  question  in  any  manner.  The  very
concept of  conversion  of  leasehold  rights  to  freehold  rights  is  not
applicable to the fact situation.


Answer to Point no.3

The original lessee has been in unauthorised occupation of the  property  in
question for around 30 years (till he executed a sale deed in favour of  the
respondent) and the respondent has been illegally inducted in possession  of
the  same,  by  the  original  lessee,  who  himself  was  in   unauthorised
possession of the property. For around 17  years  the  respondent  has  been
enjoying the property in question without  any  right,  title  or  interest.
Thus, both are liable to pay the damages  for  unauthorised  occupation  and
the DDA is empowered under Section 7 of the  Public  Premises  (Eviction  of
Unauthorised Occupants) Act, 1971 to claim  damages  from  them.  We  record
this finding in exercise of our appellate power in view of our  finding  and
reasons assigned in this judgment holding that  the  concurrent  finding  is
not only erroneous but also suffers from error in law in granting decree  of
permanent injunction in favour of the respondent who is not entitled in  law
for the same. There is a miscarriage of justice in granting  the  relief  by
the courts below in favour of the respondent. Further, keeping in  view  the
public interest involved in this case and particularly having regard to  the
peculiar facts and circumstances of the case we have to  allow  this  appeal
of the DDA. Since we have answered the  points  framed  in  this  appeal  in
favour of the appellant-DDA, we further, direct the DDA to  take  possession
of the property immediately without resorting to  eviction  proceedings,  as
the respondent has been  in  unauthorised  possession  of  the  property  in
question, by virtue of erroneous judgments passed by the courts  below.  The
respondent has been unlawfully enjoying  the  public  property  which  would
amount to unlawful enrichment which is against the public interest.

For the aforesaid reasons this appeal is allowed, the impugned judgment  and
decree of the High Court affirming the judgments and decrees  of  the  First
Appellate Court and the Trial Court in RCA No. 75 of 1982 and OS No.  47  of
1975 respectively, is hereby set aside. Accordingly, We pass  the  following
order–

 The DDA is allowed to take the  possession  of  the  property  in  question
immediately and dispose of the same in accordance  with  the  provisions  of
the DD Act read with the relevant Rules in favour of an  eligible  applicant
by conducting public auction, if it intends to dispose of the property.
 The DDA is entitled for the recovery of damages  from  both,  the  original
lessee or his legal heirs and  the  respondent,  for  the  period  of  their
unauthorised occupation of the property at the market rate prevalent in  the
area.
 The amount which has been deposited, with the DDA,  by  the  respondent  as
conversion charges is to  be  adjusted  towards  the  damages  that  may  be
determined by the DDA in accordance with law.
The costs of Rs.1 lakh is awarded to the DDA, payable by the respondent  for
these proceedings.


                       ………………………………………………………J.
                       [V. GOPALA GOWDA]


                                ………………………………………………………J.
                                [ARUN MISHRA]

New Delhi,
12th April, 2016
-----------------------
[1]
      [2]  (2005) 5 SCC 543
[3]
      [4]  (2006) 4 SCC 205
[5]
      [6]  (1990) 4 SCC 406

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