Delhi High Court set aside a 2002 order that had rejected a petitioner’s application to convert a residential property from leasehold to freehold. Justice Amit Sharma ruled that the respondent’s (L&DO) rejection—based on a 1969 re-entry order and a demand for approximately ₹2 crores in misuse charges—was arbitrary and legally unsustainable. The Court emphasized that since the petitioner had successfully evicted the defaulting tenants who caused the misuse, he was entitled to a reduced token penalty of 1% under the government’s own policy. Criticizing the L&DO for remaining silent for over 23 years before raising an “exorbitant” demand, the Court directed a fresh reconsideration of the conversion application within four weeks.
1. Nature of the Dispute
The legal heirs of the deceased petitioner sought a Writ of Certiorari to quash orders dated August 14, 2002, and November 20, 2004, which rejected their application for freehold conversion of a property located at 8, Lady Hardinge Road, New Delhi.
2. History of Misuse and Re-entry
- The property was originally allotted in 1922 for residential use. In the late 1960s, portions of the property were misused as offices by tenants.
- Consequently, the Land & Development Office (L&DO) issued a re-entry order in May 1969, determining the lease.
- Between 1970 and 1974, the petitioner wrote multiple letters offering to pay regularization charges and requesting terms to withdraw the re-entry, but these were not responded to by the L&DO.
3. The Demand for ₹2 Crores
It was only in September 1992—23 years after the re-entry order—that the L&DO issued a demand notice for approximately ₹2 crores to regularize the breaches. The petitioner objected, arguing the demand was exaggerated and time-barred, especially since the tenants had already vacated the premises by 1995.
4. Grounds for Rejecting Conversion
The L&DO rejected the petitioner’s 1999 conversion application on two primary grounds:
- Status of the Lease: The property had been re-entered and the lease was no longer subsisting.
- Pending Litigation: There were ongoing proceedings between the lessee and lessor under the Public Premises Act.
5. Court’s Analysis and Legal Findings
- Natural Justice Violated: The Court found no record of a mandatory Show Cause Notice being served before the 1969 re-entry order.
- Applicability of Policy: Various Office Orders (dated 1996 and 1999) clarify that re-entry is not a permanent bar to conversion; re-entry should be revoked upon payment of prescribed charges.
- Tenant Misuse Rule: Under Office Order No. 23/76, if a lessee is not at fault and takes legal steps to evict misusing tenants, the liability for misuse charges is limited to a token penalty of 1%. The petitioner had filed seven eviction petitions and successfully stopped the misuse.
- Unreasonable Delay: The Court held that raising a demand after decades of silence was unfair, noting that “no person can be penalized for no fault of his own”.
6. Final Conclusion
The Court concluded that the demand for ₹2 crores at market rates was not fair or reasonable. It set aside the 2002 rejection order and directed the L&DO to reconsider the conversion application afresh within four weeks. The L&DO remains at liberty to inspect the property and issue a fresh show-cause notice if any current breaches are discovered.
2026 DHC 5671
Arjun Dev (Since Deceased) Through L.Rs. v. UOI & Anr. (D.O.J. 16.07.2026)
