DELHI DEVELOPMENT AUTHORITY versus M/S. ANANT RAJ AGENCIES PVT. LTD.
[2016] 1 S.C.R. 787, Supreme Court of India, 2016
Outcome: Appeal(s) allowed (Granted)
Segment: Ratio
[2016] l S.C.R. 787 
'DELHI DEVELOPMENT AUTHORITY 
v. 
M/S. ANANT RAJ AGENCIES PVT. LTD. 
(Civil Appeal No. 3 783 of2016) 
A 
APRIL 12, 2016 
B 
[V. GOPALA GOWDA AND ARUN MISHRA, JJ.] 
Delhi Development Act, 1957 - ss. 21 (1), 22 - Grant of lease 
in favo11r of original lessee for twenty years - Extension allowed 
for a further period of twenty years at option of lessee - Original 
C 
lessee approached DDA for renewal of lease - Breach of terms and 
conditions of lease by lessee - Issuance of notice dated 16.02.1968 
to lessee - Four years later termination of lease - Suit for perpetual 
injunction by original lessee seeking restraining order against DDA 
- Suit decreed infavour of original lessee - First appeal by DDA 
dismissed - During pendency of second appeal by DDA, said 
D 
property purchased by the respondent vide sale deed in view of 
compromise decree passed by the High Court - Substitution of 
respondent in place of the original lessee - Payment of charges for 
conversion from leasehold to freehold by respondent - Dismissal of 
second appeal by High Court holding that acceptance of rent by 
DDA pursuant to a demand made by it amounts to a renewal of E 
lease in respect of the property - On appeal, held: Property is a 
Public Premises in terms of s.2(e)(3)(ii) of the 1971 Act - 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 
f 
the rent by DDA after expiry of the lease period would not be 
construed as renewal of lease for another period of 20 years -
Also the original lessee failed to remedy the breaches -In the absence 
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of renewal of lease, status of the original lessee, in relation to the 
property was that of an unauthorised occupant in terms of s. 2(g) 
of the 1971 Act- Person having no right, title or interest in the ·a 
property cannot transfer the same by ·way of sale deed - Sale of the 
property by the original lessee in favour of the respondent was not 
a valid assignment of his right in respect of the same, thus, not 
binding on the DDA - Deposition of conversion charges of the said 
property from lease hold to free hold right to DDA also not of any 
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SUPREME CQl,,<. l REPORTS 
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help to respondent - Thus, the order passed by the High Court set 
aside - DDA to take the possession of the property without resorting 
to eviction proceedings - DDA entitled for the recovery of damages 
from both, the original lessee or his legal heirs and the respondent 
- Public Premises (Eviction of Unauthorised Occupants) Act, 1971 
- ss. 2(e){3){ii), 2(g) - Delhi Development Authority (Disposal of 
Developed Nazu/ Land) Rules, 1981 - r. 43. 
Allowing the appeal, the Court 
HELD: 1.1 The concurrent findings recorded by the courts 
below declaring the termination notice dated 01.09.1972, 
terminating the lease of the property in qnestion granted in favour 
of the original lessee, served by the DDA to the original lessee, 
as illegal, arbitrary and without jnrisdiction 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 IIl(b) 
of the lease deed and has been paying rent for the property in 
question to the office of the DDA. The said conclusion of the 
courts below is erroneous in law as it is contrary to the Clause 
Ill (b) of the lease deed and also Sections 21(1) and 22 of the 
Delhi Development Act, 1957 read with Rule 43 of the Delhi 
Development Authority (Disposal of Developed Nazul Land) 
Rules, 1981. [Para 24] [799-B-D] 
1.2 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. 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 
inJhe light of *Slianti Prasad Devi, **Sarup Singli Gupta and 
*** Aslioka Marketing Ltd. cases, 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 favour of the 
original lessee, for another period of 20 years. [Para 25] [802-G; 
803-A-B]
DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ 
AGENCIES PVT. LTD. 
Shanti Prasad Devi & Am: v. Shankar Mahto & Ors. 
2005 (1) Suppl. SCR 418: (2005) 5 SCC 543; Sarup 
Singh Gupta v. S. Jagdish Singh & Ors. (2006) 4 SCC 
205; Ashoka Marketing Ltd & Anr. v. Punjab National 
Bank & Ors. 1990 (3) SCR 649:(1990) 4 SCC 406 -
relied on. 
1.3 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 Qf the lease of the 
property in question. (Para 27) (803-F-G) 
1.4 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. [Para 28) (804-D) 
1.5 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 said 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 
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SUPREME COURT REPORTS 
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days, which is absolutely in consonance with Section 5 of the 1971 
Act. [Para 29] [804-F-H; 805-A) 
1.6 Without examining the case in m • .,roper perspective 
that the property in question being a Public Premises in terms of 
Section 2(e) of the 1971 Act and that after expiry of lease period 
the original lessee has become unauthorized occupant in terms 
of Section 2(g) of the Act in the light of relevant statutory 
provisions and rules and law laid down by the Constitution Bench 
of this Court in Asltoka Marketin1: Ltd. & Anr. case, the concurrent 
findings of the courts below is not only erroneous but also suffers 
from error in law. [Para 30] [805-B-C) 
1.7 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 ADJ and 
further by the High Court by its judgment and order are not only 
erroneous but also suffers from error in law. [Para 31] (805-D] 
2.1 The High Court's order whereby the respondent was 
substituted in place of the original lessee on its application under 
Order 22 Rule 10 CPC for the reason of execution of sale deed 
by the original lessee in favour of the respondent by
entering 
into compromise between them in Suit is also bad in law. The 
sale of the property in question to give effect to the compromise 
decree in the said 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. The person 
having no right, title or interest in the property cannot transfer 
the same by way of sale deed. Thus, the sale of the property by 
the original lessee in favour of the respondent is not a valid 
assignment of his right in respect of the same. The sale deed is 
not binding on the DDA. [Para 32] (805-E-G] 
2.2 In the absence of renewal of lease of tlie property by 
the DDA, the original lessee himself becomes an unauthorised 
occupant of the property in question. The deposition of 
conversion charges of the property from lease hold to free hold
DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ 
AGENCIES PVT. LTD. 
right 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 qnestion. The instant case having pecnliar facts and 
circnmstances, 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 1971 Act and consequently, not entitled to 
deal with the property in any manner. The very concept of 
conversion of leasehold rights to freehold rights is not applicable. 
[Para 33] [806-B-D] 
2.3 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 riglit, title or interest. Thus, 
both are liable to pay the damages for unauthorised occupation 
and the DDA is empowered under Section 7 of the 1971 Act to 
claim damages from them. 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. 
[Para 34] [806-E-G] 
2.4 The impugned judgment and decree of the High Court 
affirming the judgments and decrees of the First Appellate Court 
and the Trial Court is set aside. The DDA is allowed to take the 
possession of the property in question 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 and dispose of 
the same. The DDA is entitled for the recovery of damages from 
both, the original lessee or his legal heirs and the respondent. 
The amount which has been deposited, with the DDA, by the 
respondent as conversion charges is to be adjusted towards the 
damages. The costs of Rs.1 lakh is awarded to the DDA, payable 
by the respondent for these proceedings. [Para 35) [807-B-F) 
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SUPREME COURT REPORTS 
Case Law Reference 
2005 (1) Suppl. SCR 418 
(2006) 4 sec 205 
1990 (3) SCR 649 
relied on. 
relied on. 
relied on. 
[2016) 1 S.C.R. 
Para 25 
Para 25 
Para 25 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3783 
of2016 
From the Judgment and Order dated 31.05.2011 of the High Court 
of Delhi at New Delhi in RSA No. 6 of 1983. 
Ashwani Kumar and Rahul Bhatia for the Appellant. 
C. S. Vaidyanathan,Anuradha Mukherjee, Nikhil Nayyar, Shreya 
S., Dhananjay Baijal, N. Sai Vinod for the Respondent.. 
The Judgment of the Court was delivered by 
V. GOPALA GOWDA, J. 1. Leave granted. 
2. 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 "ODA") holding that acceptance ofrent, in the instant case, by 
the DOA pursuant to a demand made by it amounts to a renewal of 
lease in respect of the property in question. 
3. Brief facts are stated hereunder to appreciate the rival legal 
contentions urged on behalfofthe 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 DOA 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 ODA. 
4. 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·of20 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:
DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ 
AGENCIES PVT. LTD. [V. GOPALA GOWDA, J.] 
"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: 
"IlI(b) in case this lease with the lessee shall continue for the said 
period of20 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." 
5. On 23.02.1967, the original lessee approached the DDA for 
renewal of his lease. The DOA 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: 
a. The mezzanine floor of the said building being used for printing 
press and office purposes by different tenants in contravention of 
the clause \(vi) and (vii) of the lease deed. 
b. Cold storage has been sublet to Mis Baikunth cold storage since 
December, 1965 in contravention of clause 1 (vii) of the lease deed. 
c. Portion of mezzanine floor being used for residential purposes 
by the cold storage staff in contravention of clause \(xv) of the 
lease deed. 
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d. Only single storey building stands .on the plot in place of four 
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storied building in contravention of clause l(xv)(c) of the lease 
deed. 
By the said notice, 15 days time was given to the original lessee tp 
remedy the breaches as pointed out in the show cause notice. The original 
lessee replied to the said show cause notice through various 
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[2016] l S.C.R. 
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communications dated 01.03.1968, 26.06.1968and01.07.1968. However, 
no further communication was issued by the DDA in this regard. 
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6. 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. 
7. Aggrieved by the decision of the DDA, the original lessee filed 
original suit for perpetual injunction bearing no. 47of1975 before the 
Sub-Judge, Delhi seeking restraining order against the ODA. 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. 
8. Aggrieved by the decision of the learned Sub-Judge, the DDA 
preferred the First Appeal vide RCA No. 75of1982 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. 
9. Aggrieved by the said judgment of the learned ADJ, ODA 
preferred the Second Appeal vide RSA No. 06of1983, before the High 
Court of Delhi at New Delhi. During the pendency of the said second 
appeal an application vi de CM No. 13336 of 2007 was moved under 
Order 22 Rule 10 of the CPC for substitution ofM/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 
vi de order dated 03 .11.2009 substituted the respondent in place of the 
original lessee-Balraj Virmani in the second appeal proceedings. 
10. During the pendency of the said RSA No. 6 of 1983, the 
respondent applied to ODA 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. I 0015 of 2005 before the High Court of 
Delhi praying for directions to be issued to the ODA to consider the
DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ 
AGENCIES PVT. LTD. [V. GOPALA GOWDA, J.] 
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 DOA to decide the matter 
ofconversion within a period of8 weeks after the disposal of RSA No. 
6ofl983. 
11. The High Court by its judgment and order dated 31.05.2011 
has dismissed RSA No. 6of1983 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 ODA raising certain substantial questions of 
law urging various grounds. 
12. Mr. Ashwani Kumar, the learned counsel appearing on behalf 
of the DDA contended that the High Court has failed to appreciate that 
the originai 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. 
13.lt 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 Ill (b) of the lease deed 
dated 06.01.1951 thatthe lease was unilaterally renewable at the option 
of the lessee in respect of the leased property in favour of the original 
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lessee. 
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14. The learned counsel further contended that after
the 
admission of the breaches, in respect oftenns 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 Jessee in the office of the 
DDA. 
15. 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 detennination oflease in his favour by eftlux of time. Therefore, 
the original lessee, having no right, title or interest in the said property, 
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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. 
16. 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. 
17. 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 oflease on 10.08.1968. It was further submitted 
that the DOA 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 ofrent by the
DOA on various occasions pursuant 
to demand made by it, clearly proves the intention of the ODA that the 
lease is renewed in favour of the original lessee. 
18. 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 DOA to assert its right and 
power in respect ofre-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 ODA 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 Ol .03.1968, 26.06.1968 and 
01.07.1968. The ODA after receiving the replies from the original lessee
DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ 
AGENCIES PVT. LTD. [V. GOPALA GOWDA, J.] 
neither communicated nor took any action to take the possession of the 
property in question and therefore, the conclusion that the DOA was 
satisfied with the replies made by the original lessee can be safely arrived 
at. In fact, the demand ofrent by the office of the DOA 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 ODA in Jetting 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. 
19. 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 DOA 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 DOA and therefore, it has no
right to raise any 
new plea in this regard at this stage. 
20. The learned senior counsel further submitted that the DOA 
has deliberately and intentionally suppressed and concealed material fact 
from this Court i.e., the policy of the DOA 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 DOA to the 
respondent. He further submitted that admittedly, the ODA has not 
refunded the amount ofRs.96,41,982/-deposited by the respondent as 
conversion charges. 
21. While concluding his contentions the learned senior counsel 
submitted that the courts below have rightly rejected the case of the 
ODA 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 DOA, in respect of the said property, pursuant 
to the demand made by the office of the ODA 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 
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22. 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: 
1. 
2. 
Whether the original lessee has acquired any right, in respect 
of the property in question after the termination oflease 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 DOA in writing as provided under Clause III(b) of the 
lease deed, by virtue of payment ofrent in the office of the 
DOA? 
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? 
3. 
What order? 
Answer to Point No.1 
23. 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 DOA in favour of the 
original lessee, in accordance with clause lll(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 DOA 
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 ofDDA 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 ODA vide notice dated 01.09.1972 decided not to
DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ 
AGENCIES PVT. LTD. [V. GOPALA GOWDA, J.] 
renew the lease of the property in question and terminated the lease in 
respect of the same, though in Jaw 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. 
24. 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 ofthe 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 
&Am: v. Sllankar Maftto & 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 oflease 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, 
1 t2oosi s sec 543 
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SUPREME COURT REPORTS 
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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 ofrenewal clause that is before the expiry
oflease. 
It was exercised after expiry oflease 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 
G 
on another decision of this Court in the case of Sarup singfl Gupta v. 
S. Jagdis/1 Singfl & Ors', 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 Propertv 
Act showing an intention to treat the lease as subsisting. The fact 
H 
' (2006) 4 sec 20s
DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ 
AGENCIES PVT. LTD. [V. GOPALA GOWDA, J.) 
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) 
25. Further, in the case ofAslwka Marketinl( Ltd. & Anr. v. 
Punjab National Bank & Ors.!, 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 
801 
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law regulating the relationship oflandlord and tenant contained in . p 
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, ~herefore, 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 
' (1990J 4 sec 406 
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SUPREME COURT REPORTS 
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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 enactmentthe 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 ..... .Jn 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; .... "
DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ 
AGENCIES PVT. LTD. [V. GOPALA GOWDA, J.] 
Therefore, in the instant case, as per clause IIl{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 
Aslwka Marketing Ltd. cases (supra), there cannot be an automatic 
renewal oflease 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. 
26. Further, the property in question, vested in the DOA, 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" 
27. Section 3(2) of the DD Act says the Authority shall be a 
body corporate by the name Delhi Development Authority (ODA). 
Section 21 of the DD Act empowers the ODA 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 ODA to grant lease 
includes renewal oflease and in the absence of such a renewal oflease 
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 ofrenewal oflease 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 DOA 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 ODA 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: 
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SUPREME COURT REPORTS 
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"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." 
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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. 
28. 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." 
29. In the absence of renewal of lease after I 0.8.1968, the 
pleadings of the original lessee that the DOA 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 DOA 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
DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ 
AGENCIES PVT. LTD. [V. GOPALA GOWDA, J.] 
in consonance with Section 5 of the Public Premises (Eviction of 
Unauthorised Occupants) Act, I 971. 
30. 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 Ashok<1 
M<1rketing 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. 
31. The grant of perpetual injunction by the Trial Court in favour 
of original lessee, restraining the DOA 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. I is answered in favour of the appellant. 
Answer to Point no.2 
32. The High
Court's order dated 03.11.2009 whereby the 
respondent was substituted in place of the original lessee on its application 
under0rder22 Rule 10 ofCPC forthe 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. 60 I of 1984 is also 
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bad in law. The sale of the property in question to give effect to the 
F 
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 exe-:ution 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 ·1roperty 
0 
cannot transfer the same by way of sale deed. Thus, in the inst mt case, 
the sale of the property in question by the original lessee in favt 1r of the 
respondent is not a valid assignment of his right in respect oft'ie same. 
For the aforesaid reasons, the sale deed is not binding on the O')A. The 
High Court has failed to appreciate this important factual and legal aspect 
· of the case. 
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SUPREME COURT REPORTS 
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33. The contention urged by the learned senior counsel for the 
respondent that it has deposited a sum ofRs.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 ofrenewal oflease of the property by 
the ODA, 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 l 0.08.1968 the 
lease stands terminated by effiux 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 
34. 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
DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ 
AGENCIES PVT. LTD. [V. GOPALA GOWDA, J.] 
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. 
35. 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-
A. 
B. 
c. 
D. 
Nidhi Jain 
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 DOA 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 DOA, by 
the
respondent as conversion charges is to be adjusted 
towards the damages that may be determined by the DOA 
in accordance with law. 
The costs of Rs. I lakh is awarded to the DOA, payable by 
the respondent for these proceedings. 
·Appeal allowed. 
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