WPC No.2422-2006 Page 1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 2422/2006 KIRAN KOHLI .....Petitioner Through Mr. Rajan Saluja, Advocate Versus D.D.A. .....Respondent Through Ms. Sangeeta Chandra, Adv. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA O R D E R 30.01.2008 % 1. Smt. Kiran Kohli, hereinafter referred to as the petitioner, has filed the present writ petition for directing DDA to convert property No. D-945, New Friends Colony, New Delhi from lease hold to free hold in her name. 2. The property mentioned above was originally allotted to one Mr. Amrik Singh by execution of a sub lease dated 18.1.1973. Mr. Amrik Singh executed a registered Will dated 14.10.1977 and bequeathed the said WPC No.2422-2006 Page 2 property to the petitioner. Mr. Amrik Singh expired on 12.1.1982. On the basis of the Will, DDA by an order dated 2.9.1982, mutated the property in its record in the name of the petitioner. 3. After waiting for about four years, DDA by another letter dated 14.4.1986 informed the petitioner that the mutation granted in favour of the petitioner by letter dated 2.9.1982 shall remain suspended because there was contravention of Clause II.6(a) and (b) of the Sub Lease deed, which reads as under: “II.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 Lessor which he shall be entitled to refuse in his absolute discretion. PROVIDED that, in the event of the consent being given, the Lessor may impose such terms and conditions as he thinks fit and the Lessor 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 WPC No.2422-2006 Page 3 decision of the Lessor in respect of the market value shall be final and binding. PROVIDED FURTHER that the Lessor shall have the pre-emptive right to purchase the property after deducting fifty per cent of the unearned increase as aforesaid.” 4. The stand of DDA was that the petitioner had purchased rights and interest of Mr.Amrik Singh and the Will executed by Mr.Amrik Singh in favour of the petitioner was not executed out of natural love and affection. The case of DDA was that above clause of the sub lease was violated. A reference in this regard can be made to the case of Delhi Development Authority Vs. Vijaya C. Gurshaney (2003) 7 SCC 301, wherein it was held as under:- “10. The rationale behind the formulation of its policies and guidelines issued by DDA is to curb illegal transactions in favour of persons not of blood relation of the allottee, being practised 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 property. It is always open to the 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 WPC No.2422-2006 Page 4 will have a binding effect on the parties, inabsence of rules to the contrary. 11. Furthermore, clauses 4, 5 and 8 of the lease deed, as extracted, envisage that the lessee cannot sell, transfer or part with the possession of the whole or any part of the commercial plot except with the previous consent of the lessor in writing, with a rider that the lessor can refuse the transfer. It is also provided in the proviso to clause 4( b ) that in the event of sale or foreclosure of the mortgaged or charged property, the lessor shall be entitled to claim and recover the 50% of unearned increase in the value of the plot. It is further provided in clause 8 that in the event title of the lessee in the plot is transferred in any manner whatsoever the transferor and the transferee shall within three months of the transfer give notice of such transfer in writing to the lessor. The respondent herein has not complied with any of the conditions stipulated in the lease agreement and, therefore, it was within the competence of DDA to invoke the terms and conditions stipulated in the lease agreement by charging 50% of unearned increase in the value of the plot. The letters dated 19-6-1992 and 17-9-1992, impugned in the writ petition before the High Court, were in the terms of invoking of clauses 4, 5 and 8 of the lease agreement and policy decision and guidelines of DDA as noticed above. The impugned judgment and order of the High Court runs contrary to the terms and conditions stipulated in the lease agreement and the same is unsustainable. It is accordingly set aside.” 5. Thus the Supreme Court held that no distinction can be made between transfers by GPA, agreement to sell etc. and transfers by Will. 5A. By another letter dated 8.5.1986, the petitioner was asked to deposit unearned increase of Rs.4,48,089/-. The said amount was not deposited. The respondent-DDA did not take any further action either to re-enter the plot or even to initiate proceedings under the Public WPC No.2422-2006 Page 5 Premises (Eviction for Unauthorized Occupants) Act, 1971. Status quo continued with both the sides taking their respective stands. 6. In the meanwhile, DDA formulated a conversion scheme under which the lease hold properties could be converted into free hold properties. DDA is aware that there are large scale transfers of residential properties contrary to Clauses II.6(a) and (b). The DDA is unable to control and monitor the said transfers or even take actions against the defaulters. This had, in fact, created a problem with the actual occupants and defacto owners of the property being different from the registered owners as per the records of DDA. For effecting transfers, in violation of Clauses 11.6 (a) and (b) the registered owners have executed documents other than sale deeds to protect rights and interest of purchasers like Will, GPA, SPA, agreement to sell, etc. 7. The Object and motive behind this scheme is to ensure that illegal transfers of property are brought on record and regularised on payment of a fee or a penalty amount, DDA is able to maintain proper records and the properties are converted into free hold from lease hold. The State also benefits with payment of stamp duty and the actual defacto owner being brought on record in the books. The land records are updated and ensures transparent and open transactions in future. In these cases therefore, waiver from payment of 50% unearned increase has been granted with a stipulation that the WPC No.2422-2006 Page 6 transferee will be liable to pay 1/3rd of conversion costs as penalty or as additional conversion costs. 8. With a view to regularize the said transfers, it was decided that the transferee while applying for conversion from lease hold to free hold, will be liable to pay a penalty or an additional amount equal to 1/3rd of the total conversion costs. This fee or the penalty amount was much lower than the 50% unearned increase payable on transfer in terms of Clauses 11.6(a) and (b) of the Sub Lease Deed. To protect the interest of DDA and to ensure that it is not saddled with claims and liabilities from the original allottee or third parties, certain documents are required to be submitted and executed by the transferee while applying for conversion. Obviously, the transferee has to file documents on the basis of which he is claiming that right, title and interest of the original allottee has transferred to him. These documents include Power of Attorney, Agreement to Sell etc. 9. In the present case, the petitioner has in his favour a registered Will, which is a document bequeathing the property in question to the petitioner, but as per the case of the respondent-DDA, it is a document of transfer in violation of Clauses II.6 (a) and (b). 10. I do not think that DDA is justified in making a distinction between a case of transfer on the basis of a Will and a transfer made on the basis of execution of Agreement to Sell, GPA etc. In both cases what is violated by the original allottee are Clauses II.6(a) and (b) of the Sub WPC No.2422-2006 Page 7 Lease Deed. Both cases are of transfer without permission of DDA, which entitles the DDA to ask for 50% unearned increase. Conversion policy will equally apply to all cases. 11. The stand of the DDA drawing a distinction between the transfers by way of GPA etc. and transfers on the basis of a Will is discriminatory, arbitrary and does not stand to any reason. Action of DDA is violative of Article 14 of the Constitution of India as there is no rationale in not treating a transfer pursuant to a Will in a similar manner as a transfer made pursuant to an Agreement to Sell, Power of Attorney etc. If, at all, transfer made pursuant to a Will stands on a better footing as in case of Will, transfer takes place immediately when the original allottee dies, under the provisions of Indian Succession Act. The title is validly transferred to the person in whose favour bequest is made on death of the original allottee. Till death of the original allottee, the Will does not result in transfer. Agreement to Sell, GPA etc. does not result in transfer of an immovable property as under the provisions of Transfer of Property Act transfer of an immovable property of value of more than Rs.100/- can only be through a registered instrument. This explains the reason why DDA in case of transfer by GPA etc., these documents have to be filed, possession has to be shown. These documents have to be scrutinized by DDA to ensure right and claim of the applicant. In the eyes of law and legally there is no valid transfer of an immovable property by execution of Power of Attorney etc. WPC No.2422-2006 Page 8 However, in case of Will, legal transfer takes place immediately on death of the original allottee. 12. Further, once DDA considers a case of transmission under a Will as a case of transfer, it defines logic why the said case should not be treated at par with other cases of transfer in violation of Clause II.6 (a) and (b) of the Sub Lease Deed. No rationale to make distinction between the two cases of transfer has been explained or pointed out in the counter affidavit. The petitioner necessarily will have to execute other documents, including indemnity bond in favour of DDA to protect it from third party claims. 13. In these circumstances, I do not find any merit in the contention of the DDA that the petitioner herein must pay 50% unearned increase as also conversion costs for getting the property converted from lease hold to free hold. The petitioner will obviously be liable to pay conversion costs along with penalty costs or additional conversion costs to the respondent-DDA as is levied on other cases of transfer and for violation of Clauses II.6(a) and (b) of the Sub Lease Deed. To this extent, I find there is a merit in the contention of the petitioner and the writ petition is allowed to this extent. 14. However, there is another aspect to this case. The petitioner had filed an application for conversion on or about 30th August, 1996. The petitioner had opted to pay the conversion amount in five equal annual installments. The petitioner deposited a sum of Rs.44.796/- towards WPC No.2422-2006 Page 9 the first installment, but thereafter, did not make any other payment till 11.4.2005, when payment of Rs.1,35,443/- was made. The petitioner, therefore, did not follow the payment schedule as stipulated in the conversion form and policy. In the meanwhile, the land rates have revised and the conversion amount payable stands increased. I do not think that the petitioner is entitled to take benefit of the land rates prevailing in the year 1996. She has herself defaulted and did not deposit the conversion costs after 30.8.1996 till 2005 for a period of nearly nine years. It will be unfair to ask DDA to convert the property to free hold by charging land rates prevailing in 1996. The petitioner may file a fresh conversion application and will have to pay conversion costs with additional fee/penalty prevailing at the time when she makes the fresh application. The petitioner will be given credit of Rs.1,80,039/- which she has already deposited or any further payment which may have been deposited by the petitioner for conversion. 15. The writ petition is accordingly disposed of. In the facts and circumstances of the case, there will be no order as to costs. 16. As and when the petitioner files a fresh application form for conversion and pays the entire conversion amount with penalty and complies with all formalities, the DDA will process the case of the petitioner expeditiously and preferably within a period of three months thereafter. WPC No.2422-2006 Page 10 SANJIV KHANNA,J JANUARY 30, 2008 raj/RN