2015 (3) TMI 1423 - SC - Indian Laws

Entitlement to get the suit property converted from leasehold to freehold - suit for specific performance - HELD THAT - In the suit for specific performance filed by respondent-Gaurav Kukreja and his father-Lekh Raj Kukreja DDA was not made a party to the suit despite the fact that it was within their knowledge that the property is a leasehold property under the control of DDA and cannot be disposed of without obtaining a prior permission from the DDA. In terms of Section 15(a) of the Specific Performance Act 1963 the suit for specific performance can be filed by any party to the contract - In the instant case suit for specific performance was filed by the respondent and his father who admittedly were not the parties to the agreement to sell. The suit for specific performance is a collusive suit where the respondent and his father used the process of the court to get rid of the stamp duty registration charges and unearned increase payable to DDA. Main contention of the respondent is that he is a decree holder for specific performance and even going by the ratio of Suraj Lamp Industries (P) Ltd. s case 2009 (5) TMI 1012 - SUPREME COURT the respondent is at a higher footing than a holder of Power of Attorney and therefore the respondent is entitled to have conversion of the land. As pointed out earlier the suit for specific performance in our view is a collusive one and therefore cannot confer any right upon the respondent to claim conversion. On the date of filing of the writ petition the respondent was neither a holder of a power of attorney nor had any subsisting right in the suit property and while so the High Court was not right in holding that the respondent is entitled to apply for conversion of the property. Dehors the scheme of conversion the respondent is not entitled to apply for conversion of the property. The respondent does not fall within the ambit of Clause 13 of the Conversion Scheme and therefore the impugned order of the High Court cannot be sustained and is liable to be set aside. Appeal allowed.

Summary

Issues Involved:
1. Entitlement of the respondent to be considered as a Power of Attorney holder.
2. Validity of the civil suit for specific performance.
3. Compliance with Clause 13 of the Conversion Scheme.
4. Legitimacy of the conversion application and the respondent's right to apply for conversion.
5. Impact of the Suraj Lamp & Industries judgments on the case.

Detailed Analysis:

Entitlement of the respondent to be considered as a Power of Attorney holder:
The Division Bench of the High Court of Delhi held that the respondent is entitled to be taken as a Power of Attorney holder and therefore entitled to get the suit property converted from leasehold to freehold. The respondent argued that he complied with the conditions of the Conversion Scheme and had deposited the necessary conversion charges with the DDA. However, the DDA contended that the respondent did not satisfy the terms of Clause 13 of the Conversion Scheme as he was neither a power of attorney holder nor a holder of a sale deed in respect of the suit property.

Validity of the civil suit for specific performance:
The civil suit for specific performance was filed by the respondent and his father against Jan Talwar and Raymen Kukreja. The suit was decreed based on a compromise, with the court holding the transaction valid. However, the Supreme Court noted that the suit was collusive, aimed at evading stamp duty and registration charges. The court emphasized that the suit was filed by individuals who were not parties to the original agreement to sell, and the decree was based on a compromise among family members, which did not confer a legitimate right to the respondent for conversion.

Compliance with Clause 13 of the Conversion Scheme:
Clause 13 of the Conversion Scheme mandates that a conversion application should be filed by a person holding a power of attorney from the lessee/sub-lessee/allottee. The Supreme Court found that the respondent did not fulfill this requirement as he was neither a power of attorney holder nor a holder of an agreement to sell. The High Court's direction for conversion was primarily based on the decree for specific performance, which the Supreme Court deemed collusive.

Legitimacy of the conversion application and the respondent's right to apply for conversion:
The Supreme Court held that the respondent's application for conversion was invalid as it did not comply with the mandatory requirements of Clause 13 of the Conversion Scheme. The respondent's possession of the suit property and the decree for specific performance did not entitle him to apply for conversion. The court also noted that the respondent had not followed up on the conversion application within a reasonable time, further questioning the legitimacy of his claim.

Impact of the Suraj Lamp & Industries judgments on the case:
The Supreme Court referenced the judgments in Suraj Lamp & Industries cases, which held that transactions involving General Power of Attorney, Sale Agreement, and Will do not convey any title or create any interest in immovable property. The court reiterated that such transactions are not valid modes of transfer and cannot be recognized as deeds of title. The respondent's reliance on the decree for specific performance did not place him at a higher footing than a holder of a power of attorney, as the decree itself was found to be collusive.

Conclusion:
The Supreme Court set aside the impugned order of the High Court and allowed the appeal. The respondent was not entitled to apply for conversion of the property as he did not meet the requirements of Clause 13 of the Conversion Scheme. The court directed the DDA to return the money deposited by the respondent with 10% interest, if an application for the return of money is made.