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2016 (4) TMI 1288 - SC - Indian LawsRenewal of lease - whether acceptance of rent, in the instant case, by the DDA pursuant to a demand made by it amounts to a renewal of lease in respect of the property in question? - Held that - 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 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 question, in favour of the original lessee, for another period of 20 years as contended by the Respondent. 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 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 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 days, which is absolutely in consonance with Section 5 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971. 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 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. 1 is answered in favour of the Appellant. The contention urged by the learned senior Counsel for the Respondent that it has deposited a sum of ₹ 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 of renewal of lease of the property by the DDA, 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 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 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. 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 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.
Issues Involved:
1. Whether the original lessee acquired any rights in the property after the lease expired and was terminated. 2. Whether the respondent acquired any rights in the property through substitution during the appeal. 3. The appropriate order to be passed. Detailed Analysis: Issue 1: Rights of the Original Lessee Post-Termination of Lease The original lessee's lease expired on 10.08.1968 and was not renewed by the Delhi Development Authority (DDA). Despite the lessee's request for renewal, the DDA issued notices on 09.02.1968 and 16.02.1968 citing breaches of the lease terms, which were not remedied. Consequently, the DDA terminated the lease on 01.09.1972. The courts below erroneously concluded that the lease was renewed because the lessee continued to pay rent, which the DDA accepted. However, the Supreme Court clarified that mere acceptance of rent does not signify lease renewal under Clause III(b) of the lease deed and Sections 21 and 22 of the Delhi Development Act, 1957, and Rule 43 of the Nazul Land Rules. The court referenced Shanti Prasad Devi v. Shankar Mahto and Sarup Singh Gupta v. S. Jagdish Singh to emphasize that acceptance of rent without explicit renewal does not imply lease continuation. The property in question qualifies as public premises under Section 2(e) of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, and the original lessee became an unauthorized occupant post-lease expiration. Issue 2: Rights of the Respondent Through Substitution The respondent was substituted in place of the original lessee during the appeal based on a sale deed executed by the original lessee. However, since the original lessee had no right, title, or interest in the property after the lease expired, the sale deed was void ab initio. The Supreme Court held that the substitution was invalid as the original lessee could not transfer any rights he did not possess. The respondent's payment of conversion charges did not confer any rights, as the original lessee was an unauthorized occupant. The court emphasized that the concept of converting leasehold rights to freehold does not apply in this context. Issue 3: Appropriate Order The court found that both the original lessee and the respondent were unauthorized occupants and liable for damages. The DDA is entitled to take immediate possession of the property and dispose of it per the Delhi Development Act and relevant rules. The DDA can recover damages from the original lessee's legal heirs and the respondent for the unauthorized occupation period. The respondent's deposited conversion charges will be adjusted against the damages. Additionally, the respondent was ordered to pay ?1 lakh in costs to the DDA. Conclusion: The Supreme Court allowed the appeal, set aside the judgments of the lower courts, and directed the DDA to take immediate possession of the property and recover damages from the unauthorized occupants. The respondent's substitution and claims were invalidated, and the DDA was awarded costs.
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