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
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
