NDLI: Delhi Development Authority Vs. Nalwa Sons Investment Ltd. and Anr.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Lease Recovery of unearned increase Lease deed
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Allowed
Headnote	Lease – Lease deed – Recovery of unearned increase (UEI) in the value of the commercial plot at the time of sale, transfer assignment – Respondent no.1-public Ltd. company was allotted a commercial plot by the appellant-DDA – Pursuant thereto, a perpetual lease deed was executed by the appellant in favour of respondent no.1 – Respondent no.1 and respondent no.2 entered into an arrangement and invited an order of demerger from the Company Judge, of the High Court – The order of demerger was passed – Consequent to which, all the assets rights, powers, debts and liabilities of respondent no.1 stood transferred to respondent no.2 – As the subject plot transferred to another company-respondent no.2, appellant demanded respondents u/cl.2(d) of the appellant’s policy to pay Rs.6,17,53,998/- towards UEI and an amount of Rs.10,44,394/- towards misuse charges – Respondents failed to pay – Show cause notice issued by the appellant – Writ petition by respondents challenging the said show cause notice – Single Judge of the High Court held that the notice issued by the appellant was valid – However, Division Bench of High Court set aside the demand notice and show cause notice issued by the appellant – Respondents contended that the two companies were admittedly group companies and respondent no.1 continued to have control over the property in question – Also, the transfer of property was not to an outsider and, in any case, was without any consideration and on no-profit basis – As a result, the respondents were not liable to pay UEI – Held: The order passed by the Company Judge approving the scheme of demerger made it clear that all property, assets, rights and powers in respect of the specified properties, including the said plot, transferred to and vested in respondent no.2 – Once it is a case of transfer, it must abide by the stipulation in cl. 6(a) of the Lease Deed of taking previous consent in writing of the lessor (appellant) and to fulfill such terms and conditions as may be imposed, including to pay any unearned increase amount – Further, cl.2(d) of the appellant’s policy relating to the charge of unearned increase plainly applied to the present case – The obligation to pay UEI did not flow only from the instructions/policy issued by the competent authority of the appellant but primarily from the stipulation in the Perpetual Lease Deed in the form of cl.6(a) – Going by the plain language of cl.6(a) of the Lease Deed, there is no reason to extricate the respondents from the obligation of the lessee (transferor) flowing therefrom – Therefore, judgment of the Division Bench of the High Court set aside and the order passed by the single judge restored – DDA policy/instructions No.LSAI/ 1(6) 87/Policy Case/ Unearned Increase dated 06.09.88 – cl.2(d).
Judge	Hon'ble Mr. Justice A.M. Khanwilkar
Neutral Citation	2019 INSC 564
Petitioner	Delhi Development Authority
Respondent	Nalwa Sons Investment Ltd. And Anr.
SCR	[2019] 6 S.C.R. 783
Judgement Date	2019-04-24
Case Number	4260

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Delhi Development Authority Vs. Nalwa Sons Investment Ltd. and Anr.

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