JUDGMENT
A.K. Sikri, J.
1. M/s.Globe Associates (P) Ltd. is the company against which winding up petition was filed way back in the year 1968. In that petition the Court ordered this company to be wound up and this order was passed on 7.3.1969 i.e. Company `died’ 35 years ago. However, its ghosts still haunts. In the process of liquidation of the company’s assets, the respondents in this application purchased one property. However, they are still battling out their rights. The unique feature of the case is the manner in which it has taken the twists and turns. This application was filed by the Official Liquidator (OL) on behalf of the company wherein prayer was made for review of order dated 18.8.1983 whereby sale was confirmed in favor of the respondents herein on the ground that the value of the property was much more and, therefore, the said confirmation order be recalled. The company/OL and the respondents settled the matter during the pendency of these proceedings. However, incidental issue which arose was regarding the unearned increase to be payable to the DDA and the war is now waged between the purchaser and the DDA.
2. Let us take stock of the events which took place from time to time to appreciate the problem.
3. Vide order dated 18.8.1983 passed in the winding up proceedings, this court sanctioned the compromise/settlement in respect of Plot No.16-A, Rani Jhansi Road, Motia Khan, New Delhi. It transpires that the original owners of the plot were respondents 1 to 4 and the said owners purportedly entered into an agreement to sell this plot to the M/s.Aero Shine. After winding up order was passed the company (in liquidation) (hereinafter referred to as `the Company’) filed an application under Section 446 of the Companies Act being CA.358/80 for specific performance of the said agreement to sell. However, during the pendency of these proceedings, M/s.Aero Shine made an application i.e. CA.161/1983 to settle the dispute on payment of a sum of Rs.75,000/- with the O.L. in settlement of the rights of the Company against respondents 1 to 5 in CA.358/1980, namely, application for specific performance. It is this compromise/settlement which was approved by this court vide order dated 18.8.1983. On 29.8.1983 instant CA.504/1983 was filed by the company through OL for review/recall of the order dated 18.8.1983 on the ground that the value of the land in question was much more and even DDA which was arrayed as the respondent no.6 was demanding a sum of Rs.4,58,175.89p towards unearned increase for transferring the property in favor of the company. It may be mentioned that there is an earlier order dated 31.8.1981 on record which reads as under:
“DDA has worked out a sum of Rs.4,58,175.89p provisionally which would be payable by the applicants in case it is decided that the plot be transferred in their favor”.
4. This order was apparently passed during the pendency of the aforesaid proceedings filed by the Company for specific performance.
5. In the present application, however, compromise was arrived at between the OL and M/s.Aero Shine and order dated 14.5.1985 was passed whereby it is agreed that M/s.Aero Shine would make the payment of Rs.4,50,000/- to the company in full and final settlement of the company’s right and interest in the property and claim in relation thereto as the company would take all reasonable steps that may be necessary so that Aero Shine gets a clear title to the property. Regarding payment of unearned increase to DDA, following agreement was arrived at and directions given:
“It is also agreed that Aero Shine would be responsible for the payment of unearned increase to the DDA for the registration of the lease hold in their favor. Let notice of the date issue to counsel for the DDA and counsel for the Amar Singh. Notices be sent by the Registry without process fee”.
6. It is thus clear that while M/s.Aero Shine agreed to pay the unearned increase, and the court issued notice to DDA/respondent no.6. on the next date i.e. 21.5.1985, learned counsel for the DDA appeared and following order was passed:
“A draft of settlement deed has been drawn. It is still to be examined by the O.L. to whom a copy has been furnished. According to the order of 27/1/82 in CA 358/80, DDA appears to be willing to favorably consider the transfer of land in favor of the company in liquidation on receiving the necessary unearned increase etc., subsequently, some quantification was also done by the DDA but the counsel for the DDA explains that DDA never made any commitment to effect the transfer. It was only willing to consider, the question of transfer on appropriate terms having regard to the various legal requirements. It appears that before the settlement can be arrived at between the parties, it would be necessary for the Aeroshine to approach the DDA with a view to have the transfer effected in accordance with the requirements of the DDA. It would perhaps be necessary for Aeroshine to associate the surviving partners of Amar Singh and Co. in pursuing the matter with the DDA.
Aeroshine may therefore, take the necessary steps in that behalf. The matters be listed for further directions on July 16, 1985. Copy of the order be furnished to the counsel for the parties, including DDA.”
7. M/s. Aero Shine claims that pursuant to the aforesaid order, it submitted an application with the DDA for registration of lease deed. Case was adjourned thereafter from time to time to await the consideration by the DDA in respect of aforesaid application. Counsel for the DDA also took adjournments for this purpose. Recording of the settlement as agreed on 14.5.1985 was held up in the meantime. Few years passed in the process. On 19.9.1990 the court passed the following order:
“The matter with regard to settlement in respect of plot no.16-A, Motia Khan, New Delhi has been discussed with the parties. It is tentatively agreed that clients of Mr.Kaura will make payment of Rs.4,50,000/- with 12% interest commencing from 14th May,1985 till 13th October,1990. It is further agreed that 50% of the amount will be paid on 15th October,1990 when the case will be again listed in chamber and a joint application along with the affidavit of the official liquidator will be filed. The balance 50% will be paid by 15th April,1991. For the six months period between 15th October,1990 and 15th April,1991 clients of Mr.Kaura will pay 12% additional interest on the balance amount. These are the tentative terms of settlement. Let a formal application be brought on 15th October,1990 on which date the matter will again be considered. Put up on 15th October,1990.”
8. The amount of Rs.4,50,000/- with 12% interest as stipulated in the aforesaid order (total amount being Rs.7,42,000/-) was paid by M/s.Aero Shine to the OL. Thus settlement of the parties was recorded on 29.10.1990 that on payment of this amount to the OL, the OL would relinquish and waive all his claims and rights in plot in question. Statement of the parties to this effect was also recorded on 12.11.90. Thereafter when the matter was listed on 24.12.1990, counsel for the DDA again prayed for time to take instructions from DDA as to how much amount of unearned increase payable for registration of the lease deed in favor of M/s.Aero Shine, was required. On 11.1.1991 the representative of DDA informed that a sum of Rs.70,59,773/- was payable. DDA also filed, thereafter an affidavit to this effect. Matter was adjourned from time to time thereafter. The next order which needs to be referred is dated 15.5.1996 which reads as under:
“Mr.Nayyar says that he has not filed any reply and the dispute is basically between DDA and the Purchaser. It has been contended before me that the premises in question have never been misused and the court has directed on 29.10.90 that what would be the unearned increase for the purpose of registration of the lease deed in favor of M/s.Aeroshine in terms of Compromise application on a total consideration of Rs.7,42,500/-. On this aspect, affidavit has not been filed. If the stand of the DDA is that there is misuse, specific, details of the misuse has to be brought to the notice of this Hon’ble Court, otherwise simple query was made with DDA on 29.10.90. Let the affidavit be filed before the date fixed”.
9. After the affidavit was filed by the DDA pursuant to the aforesaid order, M/s.Aero Shine took the stand that the amount now claimed by the DDA is exorbitant and it wanted to file the objections. These objections have been filed.
10. The question, therefore, which requires determination is as to how much amount of unearned increase is payable to the DDA by M/s.Aero Shine. There may be doubt as to whether this question needs to be adjudicated in this application. However, keeping in view that for last numbers of years, various orders are passed and the issue is pending for last several years, to give quietus to the problem, the parties agreed to make submission on merits and the DDA has not taken up any such objection. In order to adjudicate on this aspect, it would be necessary to note the manner in which DDA is computing the particular amount. The stand of the DDA can be found in paras-5 and 6 of the affidavit filed in April,1996 which states that:
“Para-5- no application for permission to sell the lease hold rights has been made to the Delhi Development Authority. The Lessee would be liable to pay such rates as are prevalent on the date of grant of approval by the Competent Authority. No such approval has been granted so far. The rates that are given in the affidavit are provisional and an undertaking will have to be obtained from the lessee for payment of the difference of the amount of unearned increase to be calculated on the rate prevailing at the time of approval if and when such approval is asked for. The said approval can not be given till the misuse is stopped and damages of compounding charges as applicable are paid.
That as per the rate of 1995-96 determined by the Central Government, 50% of the unearned increase that would be payable if such permission applied for and granted then from 31-3-96 is Rs.1,02,98,379/-. As stated above, the said amount is provisional and the lessee shall be liable to pay 50% on such rates as may be prevalent at the time of grant of permission.”
” Para-6- the amount of unearned increase is to be calculated on the basis of the market rates prevailing on the date of approval of the mutation by the Competent Authority. It is further submitted that since no approval has been granted by the Competent Authority, the final rates can not be calculated at this stage. It is further submitted that the Authority had earlier made an attempt in this respect and has also filed an affidavit in respect of the same before this Hon’ble Court. The calculation as arrived by the Authority for the 50% unearned increase is annexed herewith and marked as Annexure-A.”
11. The DDA further stated in the aforesaid affidavit that as per the rates notified by the Government of India, Ministry of Urban Development vide Circular dated 5.9.1991, an amount of Rs.85,81,010/- had been worked out towards unearned increase and the lessee was also liable to pay misuse charges. According to the DDA, as on 31.3.1996, the unearned increase was Rs.1,02,98,379/- and even this was the provisional figure because of the reason stated in para-6 of affidavit filed in January 1998 (at page 161 of the Paper Book) which reads as under:
” no permission till today has been obtained from the Authority for such transfer. Hence, the final amount that falls due to be paid in such events, can not be communicated. No application seeking permission to sell the lease deed hold right has been made to the Delhi Development Authority and hence the question of granting of any such approval does not arise. Such approval has to be granted by the Competent Authority and the same can not be given till the misuse is stopped and damages/compounding charges as applicable are paid. The lessee has to apply for conversion or mutation in the concerned name and have also to pay for regularization of misuse. The calculation showed in the affidavit filed on behalf of Delhi Development Authority was a provisional calculation taking into account the hypothetical case, wherein the regularization of misuse and subsequent approval for transfer of lease hold right had been granted in the year 1996. The said amount of Rs.1,02,98,379/- was with respect to only unearned increase and lessee was liable to pay misuse charges, damages over and above the said amount. That till today, no formal application has been made for seeking permission and moreover the matter pertaining to misuse has still to be sorted out by making proper application for regularization of the same to the Competent Authority.”
12. Thus in nutshell the stand of the DDA is that the unearned increase is to be calculated on the basis of pre-determined market rates and in the instant case these rates as of 1991 as notified by the Government of India, Ministry of Urban Development have been applied in making provisional calculations. No formal application has been filed by the applicant till date before the DDA for calculation of unearned increase. The policy of the DDA is to take into consideration the pre-determined market rate on the date when approval is granted by the Competent Authority. Therefore, as and when application is made and the approval is granted, the pre-determined rates of that date would be applied while calculating the actual unearned increase. In the alternate, it is submitted that even if unearned increase on the basis of pre-determined rates of 1991 are to be applied, applicant is liable to pay interest at the rate of 18% p.a. on the calculations made provisionally i.e. Rs.1,02,98,379/- till the date of deposit and completion of requisite formalities. It was submitted that rates were calculated provisionally from time to time as directed by the court, on the basis of pre-determined rate of that particular date when the calculations were made and figures were given to this court from time to time. That does not mean, according to the DDA, that it was bound by those figures as the applicant had not even made necessary application for permission to sell and only when such application is moved and the order is passed that the actual rates would be calculated and would be payable by the Aero Shine. In support of this proposition, learned counsel for the DDA relied upon judgment of the Supreme Court in the case of Delhi Development Authority Vs. Official Liquidator, High Court, Calcutta .
13. Learned counsel for M/s.Aero Shine on the other hand, relied upon and referred to various orders passed by this Court which have already been taken note of and/or extracted above. He submitted that the DDA was taken into confidence in the matter from the beginning and the compromise was arrived at between the parties, namely, respondents 1 to 4/Aero Shine and the OL on that basis, after getting unearned increase worked out from the DDA. Therefore, the DDA was bound by the same. He further submitted that since M/s.Aero Shine agreed to make payment of Rs.4,50,000/- to the company in full and final settlement of company’s rights, unearned increase be calculated and in any case on Rs.7,42,000/- which was total consideration, given by Aero Shine to the company after adding interest. He further submitted that even if unearned increase is to be calculated on the date of application, in the present case, the application was submitted to the DDA much prior to 16.8.1985 and, therefore, rates prevailing on that date may be taken as the basis for calculating of unearned increase.
14. There is no doubt about the proposition that unearned increase is to be calculated as on the date when application is made. However, as per the DDA, no application is made till date and on the other hand M/s.Aero Shine maintains that such an application was made. We have already reproduced order dated 6.8.1985 in which it is, inter alia, recorded that “DDA has not yet considered the application of Amar Singh and Co.” The only submission of counsel for the DDA on that date was that earlier orders made on 29.7.1980 and 30.3.1981 may come in the way of DDA in taking any action on the application. The DDA was accordingly permitted to consider the application of Amar Singh and Co. for registration of lease in favor of Amar Singh and Co. in terms of application of Amar Singh and Co. and the aforesaid two orders were modified to that extent. On the next date i.e. 10.9.1985 counsel for the DDA had even taken further time to take decision on the application. However, it is on 9.10.1985 that DDA stated that no such application was made which was disputed by the counsel for Aero Shine submitting that such an application was in fact made. To prove its point, an affidavit dated 8.8.2002 of Shri Avtar Singh, partner of M/s.Aero Shine has been filed. It is stated in that affidavit that applications were made by Amar Singh and Co. to the DDA from time to time and one such application was made, reference whereof has come in the orders dated 23.7.1985, 6.8.1985 and 10.9.1985. It is also stated that copy of this application was handed over by the deponent to his counsel for handing over to the counsel for the DDA pursuant to order dated 9.10.1985. It is also mentioned that pursuant to the orders dated 23.1.2002 he searched his record and has been able to trace a copy of the application dated 2.7.1985 signed by one Shri Kartar Singh, General Attorney on behalf of Mr.Amar Singh & Co. to the Deputy Director, DDA asking for the determination of the transfer charges payable for transfer of plot in question and a copy of that application is enclosed with the affidavit. No reply to this affidavit is filed by the DDA.
Looking the matter in its entirety , it would be safe to infer and conclude that an application was submitted and it was submitted before 16.8.1985 with the DDA with request to indicate unearned increase. Following factors would be relevant to take note of in this behalf:
A. Right from beginning when the compromise talks had started between the OL and the applicant, DDA was brought in the picture and was asked to find out as to how much unearned increase was payable. In fact the court also proceeded with the matter and ultimately recorded the first compromise dated 14.5.1985, on that basis.
B. Order dated 21.5.1985 also mandated Aero Shine to approach the DDA for this purpose as recording of settlement depended on that inasmuch as the court observed that:
“It appears that before the settlement can be arrived at between the parties, it would be necessary for the Aero Shine to approach the DDA with a view to have the transfer effected in accordance with the requirements of the DDA. It would perhaps be necessary for Aero Shine to associate the surviving partners of Amar Singh and Co. in pursuing the matter with the DDA. Aero Shine may, therefore, take the necessary steps in that behalf”.
The applicant, therefore, knew that it was necessary for it to move an application through Amar Singh & Co. before the settlement could be arrived at and as a prudent person, would have taken such an action.
C. Court proceedings thereafter indicate that such an application had been moved. On the next date i.e. 23.7.1985 counsel for Aero Shine made a statement before the Court that such an application had already been made to the DDA. Immediately thereafter on the very next date i.e. on 6.8.1985 it was recorded that DDA had not considered that application. Counsel for the DDA did not say that such an application had not been made but according to him two earlier orders were passed by the court which could come in the way of DDA taking any action on that application. This hurdle was removed by the court by modifying the order. On the next date i.e. 10.9.1985 also DDA did not state that such an application was not submitted but took more time to take decision on the application.
D. Even on 9.10.1985 when the statement was made by the DDA that such an application was not made, it was stated that application was not made ” before DDA on 23.7.1985″. In fact it was not the case of Aero Shine that application was made on 23.7.1985 but it is the order dated 23.7.1985 which records that according to counsel for Aero Shine such an application had already been made and thus it must have been made prior to 23.7.1985.
E. It cannot be comprehended that on the one hand the applicant would be taking steps to settle the matter with the OL and take all necessary steps for settling the matter with the OL and on the other hand it would not even move an application before the DDA when it was also one of the steps required for this purpose. More so, when even the court directed the applicant to take such a step before the settlement could be arrived at between the parties. Knowing fully well that unearned increase has to be on the date of application, the applicant could not have taken the risk to delay the filing of such an application.
F. Along with affidavit dated 8.8.2002, a copy of one such application dated 2.7.1985 made by Amar Singh & Company through its General Attorney Kartar Singh has been produced and this affidavit has gone unrebutted.
14. I am, therefore, inclined to hold that necessary application was made by the applicant/Amar Singh & Co. to DDA for transfer of the plot in question on 2.7.1985 and thereafter statement was made on 23.7.1985 that such an application has already been made. Once we are clear on this aspect, the unearned increase which should be calculated should be on the basis of pre-determined rate as on the date of this application. One may refer to the judgment of the Supreme Court in the case of Union of India and others Vs. Dev Raj Gupta and others wherein it was held that DDA can claim unearned increase at the rates prevailing as on the date of application. The judgment cited by learned counsel for the DDA is of no avail as that is the order based on compromise between the parties and does not lay down any proposition of law. In fact there is no such discussion either. Be that as it may, even the case of DDA is that the pre-determined rate should be on the date of application. It cannot be on the date when the orders are passed because if the DDA does not pass any orders that would not mean that because of such delay applicant would suffer.
15. This application is, therefore, disposed of with the following directions:
16. The respondent-DDA shall calculate unearned increase on the basis of application dated 2.7.1985, a copy whereof is furnished by the applicant along with affidavit dated 8.8.2002 and taking into consideration the pre-fixed market rate as on that date, and not on the date of approval of mutation by the Competent Authority, in the peculiar facts and circumstances of this case. The DDA shall, however, be entitled to interest at the rate of 9% p.a. on the said unearned increase from 2.7.1985 till the payment is made by the applicant. Necessary calculation shall be made within a period of four weeks and intimated to the applicant and applicant shall pay the amount as calculated within six weeks thereafter.