JUDGMENT
Madan B. Lokur, J.
Page 2589
1. The Appellant is aggrieved by a judgment and order dated 5th August, 2002 passed by a learned Single Judge in WP (C) No. 158 of 1999. By the impugned Page 2590 judgment and order, the writ petition filed by the Respondent was allowed and it was directed that the unearned increase deposited by the Respondent be refunded to him with interest @ 18% per annum from the date of deposit till payment.
2. The facts of the case are in a rather narrow compass and the controversy is now settled by a decision of the Supreme Court.
3. Briefly, one Kailash Chand Jain was the owner of Plot No. D-924, New Friends Colony, New Delhi. He executed a Will dated 18th June, 1981 bequeathing the plot to the Respondent.
4. It appears that Kailash Chand Jain submitted building plans for constructing a residential house on the plot. The plans were sanctioned by the competent authority but before construction could commence, Kailash Chand Jain passed away on 2nd December, 1981. The plot in question consequently devolved upon the Respondent.
5. The Respondent took steps to mutate the records with the Appellant in his favor and also raise the construction but due to some business losses and the riots in Delhi in 1984, he was only able to make part construction on the plot. The Respondent applied to the Appellant for extension of time to raise the construction but by a letter dated 22nd June, 1988 he was informed that the mutation made in his favor was suspended and consequently extension of time for raising the construction could not be granted.
6. Thereafter, there was some correspondence between the parties but no useful result came out of it and, therefore, the Respondent filed a suit for a declaration and an injunction in the District Court. The suit of the Respondent was dismissed on 7th July, 1995 on the ground of limitation but it was held by the Trial Judge that the Appellant was not competent to demand unearned increase on the transfer of the plot as the property had come to the Respondent by way of a Will executed by Kailash Chand Jain.
7. The Respondent preferred an appeal against the decree dated 7th July, 1995 but during the pendency of the appeal, the Appellant sent a letter dated 26th November, 1996 restoring the mutation made in his favor. Nevertheless the Appellant demanded a sum of Rs. 4,15,891/- on account of unearned increase together with interest thereon.
8. It appears that the Respondent agreed to pay (and did pay) the unearned increase as well as the interest. He also withdrew the appeal filed by him and thereupon the Appellant granted him extension of time to construct on the plot of land and the building plans were also sanctioned by the competent authority.
9. Thereafter, the Respondent seems to have had some change of heart and demanded refund of the unearned increase deposited by him along with interest. Since there was no satisfactory response from the Appellant, the Respondent approached this Court by way of a writ petition challenging the letters dated 22nd June, 1988 and 26th November, 1996 and prayed for a direction for refund of the unearned increase, compounding charges, interest and damages etc.
Page 2591
10. Before the learned Single Judge, the Appellant placed reliance on Clause II(6)(a) & (b) of the perpetual lease sub-lease in favor of Kailash Chand Jain in respect of the plot in question. This Clause reads as follows:-
“II. The Sub-Lessee for himself, his heirs, executors, administrators and assigns covenants with the Lessee and the Lesser in the manner following, that is to say: –
(1) to (5) xxx xxx xxx
(6) (a) The Sub-Lessee shall not sell, transfer, assign or otherwise part with the possession of the whole or any part of the residential plot in any form or manner, benami or otherwise, to a person who is not a member of the Lessee.
(b) The Sub-Lessee shall not sell, transfer, assign or otherwise part with the possession of the whole or any part of the residential plot to any other member of the Lessee except with the previous consent in writing of the Lesser which he shall be entitled to refuse in his absolute discretion:
PROVIDED that, in the event of the consent being given, the Lesser may impose such terms and conditions as he thinks fit and the Lesser shall be entitled to claim and recover a portion of the unearned increase in the value (i.e., the difference between the premium paid and the market value) of the residential plot at the time of sale, transfer, assignment, or parting with the possession, the amount to be recovered being fifty per cent of the unearned increase and the decision of the Lesser in respect of the market value shall be final and binding:
PROVIDED FURTHER that the Lesser shall have the pre-emptive right to purchase the property after deducting fifty per cent of the unearned increase as aforesaid.”
11. A perusal of the aforesaid Clause shows that Kailash Chand Jain could not have sold, transferred, assigned or otherwise parted with possession of the plot to any person who is not a member of the New Friends Colony Cooperative House Building Society. Admittedly, the Respondent was not a member of the Society and in view of this, the transfer could be permitted only upon payment of 50% of the unearned increase.
12. The learned Single Judge rejected the contention of the Appellant and relied upon a decision of this Court in Mrs. Vijaya C. Gurshaney v. DDA and Ors., Writ Petition (C) No. 3636 of 1992 decided on 10th May, 1994 in which it was held that since the leasehold rights were acquired by the transferee under a Will executed by the lessee, unearned increase could not be charged by the Appellant.
13. The decision rendered by this Court in the case of Mrs. Vijaya C. Gurshaney has since been set aside by the Supreme Court in Delhi Development Authority v. Mrs. Vijaya C. Gurshaney, . Consequently, the very basis of the decision of the learned Single Judge does not hold good and the impugned judgment and order is required to be set aside on this ground itself.
Page 2592
14. In the decision rendered by the Supreme Court, a more or less identical lease deed was considered and it was observed in that case that the High Court did not at all advert to the terms and conditions of the perpetual lease deed and, therefore, side tracked the main issue. After analyzing the contents of the relevant clauses of the lease deed, the Supreme Court observed in paragraph 10 of the Report as follows:-
“The rationale behind the formulation of its policies and guidelines issued by DDA is to curb illegal transactions in favor of persons not of blood relations of the allottee, being practiced rampantly and the property being transferred by an underhand sale in the garb of Will and power of attorney etc. DDA has formulated a policy that in such cases the department would ask for 50% of unearned increase in the value of the property. It is always open to appellants to inquire whether an alleged Will is in actuality a sale in the garb of Will in total disregard of the policy-decision of the authority. Merely because Probate/Letters of Administration are granted would not preclude DDA from so inquiring. It must be grasped that DDA has been given no notice of the testamentary proceedings. Therefore, it would have no right to appear or oppose such proceedings. As already said, DDA is a creature of the Statute and any policy-decision or guidelines formulated by such authority will have a binding effect on the parties, in absence of rules to the contrary.”
15. In so far as the present case is concerned, there is nothing to suggest that the Respondent is any blood relation of Kailash Chand Jain. In any case, he is not a member of the New Friends Cooperative House Building Society and in view of the specific terms of the lease deed, the plot in question could not have been bequeathed to the Respondent without his having to pay unearned increase for effecting the transfer of the plot in his favor. The Appellant was fully entitled to go behind the terms of the transaction and arrive at the conclusion that it did, namely, that the Respondent was bound by the terms of the perpetual lease and was obliged to pay 50% of the unearned increase.
16. In view of the specific decision of the Supreme Court on the subject, we allow the appeal and set aside the impugned judgment and order. The parties will bear their own cost.