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TMI Blog2011 (8) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... mpleading auction purchasers as co-respondents. On 25th July, 2011, a copy of the perpetual sub-lease deed dated 10th January, 1973 was placed on record. The said document is relevant and was referred to by the learned single judge but was not previously on record. The respondent No. 1 in the meanwhile had filed an affidavit along with annexures. The said affidavit and the contents thereof have been examined below. 3. Property No. A-35, Mohan Cooperative Industrial Estate, New Delhi (Property, for short) was put to auction by the Tax Recovery Officer for realization of income tax dues from Gulab Singh Sethi and Sons. The property is leasehold, the respondent No. 2 being the lessor. In the public auction held on 18th September, 1981, the property was purchased for Rs. 13,22,000/- by R.K. Dhingra for and on behalf of M/s R.K.Enterprises. The Tax Recovery Officer on 19th Oct., 1981 confirmed the sale and issued the order of confirmation. On 30th January 1982 certificate of sale of immovable property was issued in favour of Raj Kumar Dhingra (HUF), Kaushaliya Devi Dhingra, Vijay Krishan, Inder Kumar and Ravinder Kumar (hereinafter referred to as the purchasers, for short) and e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an affidavit. In the said affidavit he has stated that he is the founding director of the respondent No. 1 company and the other founding directors were her mother, Kaushaliya Devi Dhingra, Vijay Kishan, Inder Kumar and Ravinder Kumar, his three brother-in-laws. They are the same persons in whose favour the sale certificate has been issued. Kaushaliya Devi Dhingra, it is stated, expired on 9th January, 2007 leaving behind Raj Kumar Dhingra and her five daughters. The daughters have relinquished their interest in favour of Raj Kumar Dhingra. Vijay Kishan has also relinquished his interest in favour of Raj Kumar Dhingra. Inder Kumar and Ravinder Kumar have executed registered power of attorney in the joint name of Raj Kumar Dhingra and Manish Kumar Dhingra. Copies of these documents have been enclosed. Accordingly, Raj Kumar Dhingra and Manish Kumar Dhingra have been impleaded as respondent Nos. 3 and 4. 7. The inter se transactions/agreements between the five purchasers and respondent No. 1 are not subject matter of the present decision and we are not examining the said aspect. However, affidavit filed by Raj Kumar Dhingra has been taken on record and as we have impleaded Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or parting with the possession, the amount to be recovered being fifty per cent of the unearned increase and the 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. (c) Notwithstanding anything contained in sub-clauses (a) and (b) above, the Sub-Lessee may, with the previous consent in writing of the Chief Commissioner, mortgage or charge the industrial plot to such person as may be approved by the Chief Commissioner in his absolute discretion. PROVIDED that, in the event of the sale or fore-closure of the mortgaged or charged property, the Lessor shall be entitled to claim and recover the fifty per cent of the unearned increase in the value of the industrial plot as aforesaid, and the amount of the Lessor's share of the said unearned increase shall be a first charge, having priority over he said mortgage or charge. The decision of the Lessor in respect of the market value of the said industrial plot shall be final and binding on all parties concerned. PROVIDED FURTHER that the Lessor shall hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to transfer leasehold right, which he enjoys, to a third party, subject to a contract to the contrary. However, the lessee continues to be liable for the terms and conditions of the lease. 12. In view of the aforesaid legal position and the terms of the sub-lease quoted above, there cannot be an iota of doubt that unearned increase is payable under the provisions of Transfer of Property Act, 1882 and the sub-lease, with special regard to provisions in the said sub-lease deed on the involuntary sale and transfer of the leasehold rights in favour of the purchasers for recovery of the dues payable by the defaulting assessee/lessee Gurcharan Singh Sethi. Payment of unearned increase is a pre-condition imposed in the sub-lease deed for transfer of the leasehold rights from the sub-lessee to a third party. The said term/condition is binding and without the same being satisfied, the rights in the property, i.e., sub-lease rights, cannot be transferred from the sub-lessee, i.e., Gurcharan Singh Sethi, to any third party i.e. the purchasers. Payment of unearned increase is a condition precedent and not a condition post transfer. 13. This brings us to the IInd Schedule of the Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall proceed to investigate the claim or objection: Provided that no such investigation shall be made where the Tax Recovery Officer considers that the claim or objection was designedly or unnecessarily delayed. (2) Where the property to which the claim or objection applies has been advertised for sale, the Tax Recovery Officer ordering the sale may postpone it pending the investigation of the claim or objection, upon such terms as to security or otherwise as the Tax Recovery Officer shall deem fit. (3) The claimant or objector must adduce evidence to show that- (a) (in the case of immovable property) at the date of the service of the notice issued under this Schedule to pay the arrears, or (b) (in the case of movable property) at the date of the attachment, he had some interest in, or was possessed of, the property in question. (4) Where, upon the said investigation, the Tax Recovery Officer is satisfied that, for the reason stated in the claim or objection, such property was not, at the said date, in the possession of the defaulter or of some person in trust for him or in the occupancy of a tenant or other person paying rent to him, or that, being in the possession of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty is sold in execution of a certificate what will vest with the purchaser are merely the right, title and interest of the defaulter at the time of sale. It is only the right, title and interest of a defaulter in the immoveable property which is sold. If there are any fetters or pre-conditions on the right, title and interest of the defaulter in an immoveable property, they have to be complied with. They do not get abrogated or unwritten. On execution of the sale certificate by the Tax Recovery Officer the right, title and interest in the property is deemed to vest in the purchaser from the time when the property was sold. Rule 8 deals with how the proceeds from the sale have to be distributed. The appellant is correct that the Rule 8 does not stipulate that payment has to be made to a third party or the lessor, but this is inconsequential or ineffective. Rule 8 is silent. It cannot be read either in affirmative or in negative. Intention of the legislature can be gathered from the provisions of the IInd schedule. Rule 8 stipulates that the sale proceeds sale should be first adjusted towards the amount due under the certificate and the balance, if any, towards satisfaction of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is accepted that the respondent no.2 is a lessor or the absolute owner and sub lease rights were transferred to Gurcharan Sigh Sethi, to then conditionally vest with the defaulter assessee. Sub-Rule (1) of the Rule 11 is to be read with Sub-Rule 4. Any decision of the Tax Recovery Officer in respect of claim of the property preferred can be made subject matter of a suit in the civil court. Subject to the decision of the civil court, the decision of the Tax Recovery Officer is final [Sub-Rule (6) of 11]. As noticed above, the decision of the Tax Recovery Officer is only required if there is a dispute as specified by sub-Rule 4 to Rule 11. If there is no dispute, jurisdiction of the civil court is not required to be invoked. We need not examine what is covered or the scope of sub-Rule 4 to the Rule 11 as the said aspect is not relevant in the present matter. 17. As noticed above, under the IInd Schedule, Rule 6 a certificate is to be issued in favour of the purchaser by the Tax Recovery Officer and on the said certificate being issued the right, title and interest of the defaulter assessee vests with the purchaser. If there is a pre-condition of payment of unearned incre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Sh. C.L. Arora J.R. Basheshar Nath TRO XX (N.D.)‖ 20. The aforesaid terms and conditions did not stipulate that the bidder would have to pay 50% unearned increase or bear such burden. There was no such stipulation. The sub-lease deed or copy thereof was with the appellant and they had finalised the terms of sale. In case 50% unearned increase was to be paid separately by the purchaser, it should have been so indicated and mentioned. This would have resulted in a lower bid amount. It is not the case of the appellant that sale consideration paid by the purchasers was less than the market price. No document has been placed on record to establish that the bid amount was low because the bidders were aware or were made aware that they have to bear 50% unearned increase separately. It is not the contention of the appellant that the parties were not ad idem and therefore the there was no concluded contract. On the other hand, the plea which has been taken by the appellant is that 50% unearned increase is payable by the original sub lessee and not by the appellant or the Tax Recovery Officer. The terms of auction did not stipulate that the original sub-lessee shall pay 50% u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter has got delayed as a consequence of the differences between the two respondents, who are Government and Government authority, the time period for completing construction in respect of the plot in question shall be extended for a period of two years from the date of grant of no objection certificate for sanction of building plans. The writ petition is allowed in the aforesaid terms leaving the parties to bear their own costs. Dasti to learned counsel for the parties.‖ [Emphasis supplied] 22. Under Section 40-A of the Delhi Development Act, 1957, any money due to the Authority on account of fees or charges, or from the disposal of lands, buildings or other properties, moveable or immoveable, or by way of rents and profits may, if the recovery thereof is not expressly provided for in any other provisions of this Act, be recovered by the Authority as arrears of land revenue. 23. We may add that in the impugned judgment it is recorded that the property is mortgaged with State Bank of Bikaner and Jaipur and title deeds are lying in the said Bank. The said bank is not a party before the writ court or before us. Observations made above will not affect their rights, if an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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