TMI Blog2003 (12) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... atish Chander Malhotra were the members of the said Cooperative Society. They in terms of the provisions of 'The Rules' were required to execute deeds of sub-lease in favour of the lessee as also the President of India. 3. The factual matrix of the matter is being considered from the case involved in civil Appeal No. 1781 of 2000. 4. On 13.12.1968, a statutory sub-lease was executed in favour of Shri Mangal Singh Monga in respect of residential plot of 1568 sq. yards in Vasant Vihar on payment of ₹ 17560/- towards premium and ₹ 26656/- towards the cost of development. In terms of proviso appended to sub Clause (b) of Clause 6 of the dead of sub lease, the lessor was entitled to 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 . Determination of the lessor in respect of the market value therefore was to be final and binding. 5. By reason of Clause X(a), of the said deed the President delegated his power to the Chief Commissioner of Delhi who is now the Lt. Governor of Delhi. The said Mangal Singh Monga died on 13.11.1983. Purported to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entioned proceedings, however, a purported resolution was passed by the D.D.A. to the effect that unearned increase should be worked out on the basis of sale consideration shown in the agreement of sale or income tax clearance certificate, as the case may be, if it is higher than the floor level rate of D.D.A. HIGH COURT JUDGMENT : 8. The High Court in its impugned judgment referring to the circular letters issued by the Lt. Governor as also the Union of India and upon taking notice of the fact that only the difference in increase price on the basis of such circular letters had been demanded from the persons similarly situated allowed the writ petition directing : We are of the view that the DDA, had no power to issue the demands in these writ petitions. Accordingly, the writ petitions are allowed and following directions are issued : The DDA shall issue fresh demand to the petitioners in all these three writ petitions on the basis of Order dated 24.6.1992. In case any amount had been paid on the basis of the impugned demand, the DDA shall be entitled to appropriate only that portion of the amount calculated in accordance with fixation of market rate of land as issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the meaning of the Clause (6) of the perpetual sub-lease deed could be what is stated in the agreement for sale. SUBSEQUENT EVENTS : 12. When the matter was taken up for hearing, before different Division Benches, the respondents herein sought to bring to this Court's notice certain subsequent event, namely, adoption of a purported policy by reason of a circular letter dated 28.6.1999 purported to have been given a prospective effect in terms whereof the leasehold was sought to be converted into freehold. The relevant portion of the said scheme reads as under : 1. COVERAGE OF THE SCHEME: i) The existing scheme of freehold conversion is extended to all residential leasehold built up properties irrespective of size. As such, leased properties, situated on land, for which the land use prescribed in the Master Plan/Zonal Development Plan in force is residential, will be covered under the scheme, irrespective of size. ii) The scheme will also extend to premium free leases i.e. leases where premium has not been charged by agencies administering the leases. 2. COMPUTATION OF CONVERSION FEE: i) In respect of properties with land area upto 500 sq. meters, the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecuted by them pursuant to or in furtherance thereof, they were entitled to be treated similarly as Rajeev Gupta. An objection to the said application had been filed by the appellant, inter alia, on the ground that subject matter of the writ petition leading to filing of these appeals has no nexus with the aforementioned scheme dated 28.6.1999. SUBMISSIONS : 16. Mr. P.P. Rao, learned senior counsel appearing on behalf of the appellant, inter alia, would submit that: (1) As the statutory sub lease refers to the market value of the residential plot, the circular letters cannot override the same and, thus, are illegal. Strong reliance in this behalf has been placed on Sant Ram Sharma v. State of Rajasthan and Anr. (1968)IILLJ830SC and State of M.P. and Anr. etc. v. G.S. Dall Four Mills etc. [1991]187ITR478(SC) . (2) Notings made in different files would show that except in one of the three cases, the fact situation prevailing in other cases were different. (3) As the circular letter dated 24.6.1992 showed locality wise market rates for the earlier period, the fixation of market rates was retrospective and not prospective. (4) Such a circular letter in any event having not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interim order granted by the High Court. (7) The interim order passed by the High Court must be construed in such a manner so as to have a bearing in the pending appeals. ARE THESE TWO CASES SIMILAR TO THAT OF RAJEEV GUPTA : 18. The following chart will show that the cases of J.S. Monga and Shri Abdul Rasool Virji stand on a similar footing as that Rajeev Gupta : S. No. Particulars J.S. MONGA Plot No.A-5/3, Vasant Vihar, N.Delhi ABDUL RASOOL VIRJI Plot No.A-1, Maharani Bagh, N.D. RAJIV GUPTA Plot No.4, Palam Marg, Vasant Vihar. N.D. 1 Date of Execution of Sub Lease Deed 13.12.1968 1.1.1965 27.4.1971 2 Name of Sub Lessee Sh. Mangal Singh Monga after his death mutation allowed in the joint names of his legal heirs : 1. Smt. Harbans Monga (wife) 2. Smt. Prabha Sehgal (daughters) 3. Smt. Indira Batra 4. Smt. Ella Bajaj 5. Sh. Joginder Singh Monga (son) 6. Sh. Mohinder Singh Monga (son) 7. Sh. Jagjit Singh Monga (son) 8. Sh. U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a sum of ₹ 1,49,72,225/-, as per the directions of the High Court. 20. The contention of the learned counsel appearing on behalf of the respondents, therefore, must be held to have some substance that whereas Rajeev Gupta has received the benefit of the purported new policy of conversion from lease hold to free hold, the respondents herein were deprived therefrom for no fault on their part. STATUTORY PROVISIONS : 21. Section 22 of the D.D.A. Act reads as under : 22. Nazul lands (1)X X X (2)X X X (3) After any such nazul land has been developed by, or under the control and supervision of, the Authority, it shall be dealt with by the Authority in accordance with rules made and directions given by the Central Government in this behalf. 22. Section 56 of the Act reads as under : 56 Power to make rules (1) The Central Government, after consultation with the Authority may, by notification in the Official Gazette, make rules to carry out the purposes of this Act : Provided that consultation with the Authority shall not be necessary on the first occasion of the making of rules under this section, but the Central Government shall take into considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sor shall have the pre-emptive right to purchase the property after deducting fifty per cent of the unearned increase as aforesaid. Clauses X(a) and (b) of Sub-Lease reads as under : X.(a) All powers exercisable by the Lessor under this Sub Lease may be exercised by the Lt. Governor, the Lessor may also authorize any other officer or officers to exercise all or any of the powers exercisable by him under this Sub-Lease (b) The Lt. Governor may authorize any officer or officers to exercise all or any of the powers which he is empowered to exercise under this Sub-lease except the powers of the Lessor exercisable by him by virtue of Sub-clause (a) above. Clause XI of the Sub Lease reads as under : In this Sub-Lease, the expression the Lt. Governor means the Lt. Governor of Delhi for the time being or, in case his designation is changed or his office is abolished, the officer who for the time being is entrusted, whether or not in addition to other, of the Lt. Governor by whatever designation such officer may be cabled. The said expression shall further include such officer as may be designated by the Lessor to perform the functions of the Lieutenant Governor under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer/sale of residential plots allotted under the Scheme of Large Scale Acquisition, Development Disposal of land in Delhi, superseding his previous orders conveyed vide order No. F.R. 16(7)/82-L B/3026-34 dated 31.1.92, as given below :- x x x 27. The appellant itself issued the following circular, relevant portion of which reads as under : Sub: Fixation of market rate of land for the purpose of Recovery of unearned increase in the value of land/plot consequent upon the Transfer or Sale of residential plots allotted under the Scheme of large Scale Acquisition Development and Disposal of land in Delhi for the period from 1.4.90 to 31.3.91 and 1.4.91 to 31.3.92. A copy of the Joint Secretary (Admn.) L B Deptt. Delhi Admn. Letter No. F-16 (7)/82/L B/20369-75 dated 24.6.92 conveying the market rates of land in different areas of Delhi for computation of unearned increase recoverable in case of transfer/sale of Resdl. Plots allotted under the scheme of Large Scale Acquisition Development and Disposal of land in Delhi is enclosed : 1. These rates would be applicable to the plots measuring upto 500 sq. meters. In respect of Sale/Transfer of plots measuring more th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xed by the authority for different purposes. Fixation of such market value, therefore, for the purpose of recovery of unearned increase cannot be said to be de' hors the D.D.A. Act and the Rules framed thereunder. 31. It is not a case where a conflict has arisen between a statute or a statutory rule on the one hand and an executive instruction, on the other. Only in a case where a conflict arises between a statute and an executive instruction, indisputably, the former will prevail over the latter. The lessor under the deed of lease is to fix the market value. It could do it areawise or plotwise. Once it does it area wise which being final and binding, it cannot resile therefrom at a later stage and take stand that in a particular case it will fix the market value on the basis of the price disclosed in the agreement of sale. 32. Reliance placed by Mr. Rao on the decision in Jawajee Nagnatham v. Revenue Divisional Officer, Adilabad. A.P. and Ors. [1994]1SCR368 is wholly misplaced. Therein the question which arose for consideration as to whether the compensation should be awarded for acquisition of land on the basis of Basic Valuation Register - maintained by registering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ors. AIR1996SC2994 , this Court observed that the guidelines provided under Section 47A of the Stamp Act would only serve as prima facie material available before the Registering Authority to alert him regarding the value, holding : ...It is common knowledge that the value of the property varies from place to place or even from locality to locality in the same place. No absolute higher or minimum value can be predetermined. It would depend on prevailing prices in the locality in which the land covered by the instrument is situated. It will be only on objective satisfaction that the Authority has to reach a reasonable belief that the instrument relating to the transfer of property has not been truly set forth or valued or consideration mentioned when it is presented for registration. The ultimate decision would be with the Collector subject to the decision on an appeal before the District Court as provided under Sub-section (4) of Section 47-A. (See also R. Sai Bharathi v. J. Jayalalita and Ors. 2004CriLJ286 ) 35. The aforementioned decisions have no application in the instant case. In those cases, registers of land acquisition was being maintained for the purpose of eva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the same valuation till 1996. Such a decision on the part of the Union of India was a conscious one. It is really surprising that on the one hand a stand is taken that Clause 6(b) of the sub-lease contain a statutory provision and, thus, cannot be altered either by the Union of India or by the Lt. Governor, recourse is sought to be taken to the provisions of Sections 2 and 3 of the Government Grants Act in terms whereof the term of any grant or term of any transfer of land made by the Government would stand insulated from the tentacles of any statutory law as thereby unfettered discretion of the Government has been conferred to enforce any condition or limitations or restrictions in all types of grants and the right, privilege and obligations of the grantee would be regulated thereunder. 41. It is all the more surprising that the appellant being a delegatee has even questioned the policy decision of the delegator, namely, the Union of India. Furthermore, such a stand is being taken despite the fact that the circular letter dated 28.6.1999 as contained in Annexure R-3 to I.A. 6 of 2003 which has also not been issued by the Union of India in terms of the D.D.A. Act or the rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place on its records any other policy decision whereupon it intended to place reliance as would appear from the following : 16.10.1996 Present : Mr. A.N. Haksar, Sr. Advocate with Mr. R.K. Virmani for the Petitioner. Ms Sudha Bhandari for Counsel for the Respondents CW. No. 3948/95 There is no counter filed on behalf of the Respondents. There is no appearance on behalf of the Union of India today. Learned Counsel for the Petitioner has invited the attention of the Court to the averments made in paragraph 23 of the petition and the documents Annexure-1 at page 50 of the paper book which according to him is the policy governing unearned increase during the relevant period. Reply to this paragraph 23 of the counter is evasive. Learned Counsel for the petitioner has also invited the attention of the Court to yet another circular issued by the DDA on unearned increase calculations which is dated 28th November, 1995. Let Counsel for the Respondents seek specific instructions and make clear statement preferably on affidavit as to whether they admit or deny the policy dated 11th November, 1994 Annexure-1 and the circular dated 28th November, 1995. If there be any other p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its policy, we do not think that they should otherwise also be given an opportunity to raise new grounds. DETERMINATION OF THE AMOUNT OF UNEARNED INCREASE BY THE APPELLANT : 48. The Appellants proceeded on the premise in the case of the Respondents, that the Circular letters issued by it or the Union of India need not be given effect to and the valuation of the land should be worked as ₹ 7,50,00,000/-for the purpose of computing the unearned increase. However, it must be presumed that the vendees proceeded on the basis that the amount of unearned increase would be determined in terms of the said circulars. Furthermore, 50% of the unearned increase was to be paid to the Appellant as a condition of lease. While determining the amount, the Appellant was required to take into account the amount of consideration specified in the agreement and/or clearance certificate issued by the Income Tax Officer. They even did not do so. INTERIM ORDER - EFFECT OF : 49. The respondents herein questioned the demand of ₹ 3,62,44,420/- made by the DDA. The DDA calculated the aforementioned demand on the basis that the total consideration for the transaction was ₹ 7,50,00,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 28.6.1999 was not in contemplation. The appellant, therefore, cannot, keeping in view the prospective effect given to the said circular, take any benefit thereof. Furthermore, they have not filed any application to amend their writ petition. They merely have urged additional grounds. It is no doubt true that this Court can take into consideration subsequent events and mould relief accordingly but thereby it cannot substitute a new relief based on a fresh cause of action. We are, therefore, of the opinion that the interim order passed by the High Court does not come to the aid of the respondents. RATE OF INTEREST : 53. By reason of the aforementioned Interim order, the High Court directed payment of 18% interest. The rate of interest which was prevailing at the relevant time was 18%. However, the bank rate of interest has since gone down drastically. Grant of interest pendente lite and for future is a discretionary remedy. The court of appeal can, therefore, exercise the same power while finally disposing the lis as that of the High Court keeping in view the principle engrafted in Section 34 of the Code of civil Procedure. The rate of interest may have to be fixed havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failing the payment in six weeks from today the liability to pay interest @ 24% per annum shall stand. 56. In K.T. Venkatagiri and Ors. v. State of Karnataka and Ors. [2003]1SCR1081 , it is stated : We are, therefore, of the opinion that with a view to do complete justice between the parties and having regard to the order passed by this Court in Khoday Distilleries case, the following directions should be issued : (1)x x x (2)x x x (3)x x x (4)x x x (5)x x x (6)x x x (7) On the amount found to be due and owing to MSIL by any of the appellants the same shall be paid and interest at the rate of 18% per annum shall be leviable from the date of realisation till 12.2.1997 and thereafter at the rate of 9% per annum, within twelve weeks from the date of final determination. 57. We may notice that in Pure Helium India Pvt. Ltd. v. Oil Natural Gas Commission was reduced to 6% in exercise of its power under Article 142 of the Constitution of India. CONCLUSION : 58. In the facts and circumstances of this case, we are of the opinion that grant of 9% interest shall meet the ends of justice. We, therefore, while dismissing the appeals direct that in stea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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