The dispute centers on a lease agreement from 1957 for a plot of land, where the DDA argues that the initial party, M/s Mehta Constructions, never acquired proper leasehold rights because the formal lease deed was not executed. Subsequent sales of the plot through various entities, including a public auction to S.G.G. Towers, are challenged by the DDA as invalid, particularly regarding unearned income and the ultimate ownership of the land. The court’s judgment examines the validity of these transactions and the rights conferred to the subsequent purchasers, concluding that the final respondent, S.G.G. Towers, does not have ownership or leasehold rights but retains the option to seek regularization with the DDA.
Delhi Development Act, 1957, Section 22 – Delhi Development Authority (Disposal of Developed Nazul Land) Rules, 1981, Rule 43 – Lease hold land – Rights on transfer – It is an accepted position that the lease was never executed by the appellant in favour of M/s ‘M’, and no rights, title, and interest were created in their favour in respect of the said plot – Therefore, at the highest, the second respondent, by virtue of the sale deed dated 15th February 1985, executed by M/s ‘M’, can claim benefits under the lease agreement, provided in law, the second respondent is entitled to it in accordance with law – As far as the auction conducted in the liquidation proceedings of the second respondent is concerned, the notice of proclamation itself records that the sale of the said plot was on “as it is basis” – Therefore, the first respondent will get only those rights which M/s ‘M’ had under the lease agreement, provided the rights can be claimed at this stage – In fact, in the impugned judgment, the Division Bench of the High Court had observed that the auction would not amount to sale of the said plot.
Held that the first respondent is not entitled to either ownership or leasehold rights in respect of the said plot – The first respondent cannot claim to be a lessee as the lease in terms of the lease agreement was never executed – At the same time, if according to the case of the appellant, M/s ‘M’ had committed breach of the lease agreement, notwithstanding the impugned orders, it will be always open for the appellant to adopt appropriate remedy for recovery of possession and/or recovery of unearned income against the first respondent – If the first respondent desires to get the transaction regularised, it is for the first respondent to apply to the appellant to accept unearned income or any other amount – If such a request is made, the appellant will consider the same in accordance with the law – Subject to the findings recorded as above, there is no reason to interfere with the impugned judgments – Accordingly, the appeal stands dismissed in the light of the findings recorded as above.
(Para 11 to 16)
Delhi Dev. Authority V. S.G.G. Towers (P) Ltd.
Supreme Court: 2025 INSC 337: (DoJ 07-03-2025)
