D.D.A. Vs. GAURAV KUKREJA
Supreme Court of India (Division Bench (DB)- Two Judge)
Appeal (Civil), 3124 of 2015, Judgment Date: Mar 24, 2015
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3124 OF 2015
(Arising out of SLP (Civil) No.9305/2011)
DELHI DEVELOPMENT AUTHORITY ......Appellant
Versus
GAURAV KUKREJA .....Respondent
J U D G M E N T
R. BANUMATHI, J.
Leave granted.
2. This appeal arises out of the order dated 15.07.2010 passed by
a Division Bench of the High Court of Delhi, dismissing the Letters Patent
Appeal No.466 of 2010, holding that respondent is entitled to be taken as a
Power of Attorney holder and is thereby entitled to get the suit property
converted from leasehold to freehold.
3. Brief facts of the case which led to the filing of this appeal
are as follows:- The property which is sought to be converted is comprised
in Plot No.N-73, Panchsheel Cooperative House Building Society Ltd, New
Delhi. DDA executed perpetual sub-lease deed dated 16.08.1967 in respect of
the suit property in favour of one Sh. Jan Talwar (Defendant No.1 in the
original suit). Jan Talwar by an agreement to sell dated 10.6.1986, agreed
to sell the suit property to Mrs. Raymen Kukreja for a sale consideration
of Rs.20,50,000/-. Jan Talwar, in respect of the same suit property, also
executed a General Power of Attorney dated 10.06.1986 in favour of Lekh Raj
Kukreja-husband of vendee i.e. Mrs. Raymen Kukreja. The cause of action
arose in the year 1989, when Jan Talwar refused to execute the sale deed,
even after receiving the complete sale consideration. This led to the
filing of civil suit being CS (OS) No.2777/1989 for a decree of specific
performance of the aforesaid agreement to sell. Though the agreement to
sell was made in favour of Raymen Kukreja, the suit for specific
performance was filed by the respondent-Gaurav Kukreja and Lekh Raj Kukreja
(father of Gaurav Kukreja) against Jan Talwar and Raymen Kukreja (mother of
Gaurav Kukreja). The civil suit was filed on the premise that both, the
GPA holder (father of Gaurav Kukreja) and vendee (mother of Gaurav Kukreja)
had surrendered their rights in favour of Gaurav Kukreja and that they had
no objection if the property is transferred in the name of respondent. Jan
Talwar having remained ex parte, the suit was decreed by Single Judge in
terms of a compromise arrived at between the parties therein. Learned
Single Judge of the High Court while deciding the CS (OS) No.2777/1989 held
the entire transaction to be valid and observed that respondent and his
father and mother were ready and willing to complete the sale transaction
dated 10.06.1986 but Jan Talwar failed to perform his part of obligation.
In the civil suit, Jan Talwar though entered appearance subsequently
remained exparte. Based on the compromise decree in the original suit,
Gaurav Kukreja applied to DDA for the conversion of suit property from
leasehold to freehold. However, the DDA refused the conversion on the
ground that as per the scheme, Gaurav Kukreja did not possess a good
title.
4. Aggrieved, respondent-Gaurav Kukreja filed W.P.(C) No.7608/2009
before the High Court of Delhi, seeking the conversion of suit property
from leasehold to freehold, on the strength of a policy decision taken by
DDA and based on the compromise decree in the civil suit. Respondent
contended that DDA wrongfully denied him the benefit of Conversion Scheme
even when respondent has complied with the conditions therein. Respondent
is stated to have deposited an amount of Rs.18,55,347/- with DDA towards
conversion charges.
5. Learned Single Judge of High Court of Delhi, after considering
material on record allowed the writ petition by holding that the decree
passed in the civil suit stands on a higher footing than any General Power
of Attorney as per Clause 13(a) of the Conversion Policy. The possession
of suit property by the respondent has been substantiated by the
correspondence between the respondent and DDA which have been exchanged at
the same address as that of suit property in respect of which conversion
has been sought. Learned Single Judge observed that respondent is a son of
an agreement holder and as well as holder of general Power of Attorney and
therefore the respondent is not a stranger to the transaction and that the
condition of Clause 13 of the Conversion Scheme stands satisfied in the
facts of the case.
6. Against the decision of the learned Single Judge of High Court
of Delhi, Letters Patent Appeal filed by the DDA also came to be dismissed.
The Division Bench, while dismissing the Letters Patent Appeal, held that
the respondent could certainly be taken to be a power of attorney holder
and thus fully entitled to apply for conversion. Being aggrieved by the
dismissal of Letters Patent Appeal, respondent-DDA has preferred this
appeal.
7. Contention of DDA is that the suit property is a leasehold
property and any attempt to dispose of the same should have been proceeded
only after an approval from DDA. It was submitted that the suit for
specific performance filed by the respondent and his father-Lekh Raj
Kukreja against Jan Talwar and Raymen Kukreja, was a collusive suit and was
an attempt to escape the payment of stamp duty and registration charges,
which would otherwise be payable on the part of the respondent on account
of registration of a sale deed. Further contention of DDA is that the
respondent does not satisfy the terms of Clause 13 of the Conversion Scheme
as he is neither a power of attorney holder nor a holder of sale deed in
respect of the suit property.
8. Per contra, learned counsel for respondent has submitted that
even after obtaining a decree of specific performance and having paid the
conversion charges alongwith surcharge of 331/3%, the conversion of the
suit property is being wrongly denied to him. It is submitted that long
back on 29.4.2004, an amount of Rs.18,55,347/- has already been deposited
with DDA alongwith an application for conversion. It is contended that the
respondent is having physical possession of the suit property and therefore
all the pre-requisites of Clause 13 of Conversion Scheme stands satisfied
and thus he is entitled to conversion of suit property from leasehold to
freehold.
9. We have carefully considered the rival submissions and perused
the impugned order and material on record.
10. 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. Jan
Talwar (vendor), during the pendency of suit, remained exparte and the
suit was decreed in terms of a compromise arrived between the parties,
all of whom were family members. In our considered view, 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.
11. Be that as it may, as per the decree for specific performance,
sale deed to be executed by the defendant namely Jan Talwar (holder of
leasehold right) and Mrs. Raymen Kukreja (holder of agreement to sell)
within the period of 30 days from the date of the decree and further
directed to pay requisite stamp duty and registration charges. The
relevant direction in the decree is extracted below:
"There will be a decree for specific performance of the agreement dated
10th June, 1986 in favour of Plaintiff No.2 and against Defendant No.1 in
respect of property No.N-73, Panchsheel Park, New Delhi. Defendant No.1
shall arrange to have sale deed executed within a period of 30 days from
today. In case he fails to do so the Registrar of this Court shall
nominate or appoint some official of this Court to execute the sale deed
for and on behalf of Defendant No.1 and in favour of Plaintiff No.2 on
payment of requisite stamp duty and registration charges. The official
nominated by the Registrar will be paid a fee of Rs.10,000/-."
(Annx.-P 3)
12. Instead of complying with the above order of the High Court and
getting the sale deed executed, after making payment of registration
charges and stamp duty, the respondent applied for conversion of the
property through Lekh Raj Kukreja (father of the respondent and power of
attorney holder) and the same was rejected. The conversion cannot be
sought for by a person who is not the owner of the property but is only
residing in the premises. Onbehalf of the appellant, it was submitted
that the DDA had even granted N.O.C. way back in the year 2006 (Annx. P8)
without receiving un-earned increase charges as per the terms of the lease-
deed which is always charged by DDA when the property exchanges hands.
According to DDA, it was granted only because a local commissioner was
appointed by the High Court. It is further stated that the respondent
deliberately did not get the sale deed executed till today and the
respondent is trying to evade the stamp duty and registration charges
thereby causing a loss to the state exchequer.
13. A scheme of conversion from leasehold system of land tenure
into freehold was brought into force and noticed by the Government. The
relevant clause of the Scheme of Conversion i.e. Clause 13 reads as under:-
"13. The conversion shall also be allowed in the cases where
lessee/sub-lessee/allottee has parted with the possession of the property
provided that:
a) Application for conversion is made by a person holding power of
attorney from lessee/sub-lessee/allottee to alienate (sell/transfer) the
property.
b) Proof is given of the possession of the property in favour of the
person in whose name conversion is being sought.
c) Where there are successive power of attorneys, conversion will be
allowed after verifying the factum of possession provided that the linkage
of original lessee/sub-lessee/allottee with the last power of attorney is
established and attested copies of power of attorneys are submitted.
In such cases, a surcharge of 331/3% on the conversion fee would be payable
over and above the normal conversion charges (no unearned increase will be
recoverable)."
In terms of Clause 13 of the Scheme, it is thus mandatory for a person to
file a conversion application to have a power of attorney from the
lessee/sub-lessee/allottee. Further in case of successive power of
attorney, Clause 13 requires for the proof of possession alongwith the
linkages of original lessee/sub-lessee/allottee with the last power of
attorney is established and attested copies of power of attorney be
submitted. In the light of Clause 13 of the Conversion Scheme, DDA
rejected the conversion application on the ground that the respondent
is not a power of attorney holder in respect of the suit
property. The property cannot be converted from leasehold to freehold
directly in the name of the respondent as he is neither a general power of
attorney holder nor a holder of agreement to sell. The High Court appears
to have issued direction for conversion mainly on the ground that the
respondent has got decree for specific performance for sale. The High Court
failed to appreciate that the decree for specific performance was based on
the alleged compromise arrived at between the family members.
14. In Suraj Lamp & Industries (P) Ltd. vs. State of Haryana &
Anr., (2009) 7 SCC 363, this Court referred to the ill-effects of what is
known as General Power of Attorney Sales (for short 'GPA Sales') or Sale
Agreement/General Power of Attorney/Will transfers (for short 'SA/GPA/WILL'
transfers), and it was held as under:
"19. Recourse to "SA/GPA/WILL" transactions is taken in regard to freehold
properties, even when there is no bar or prohibition regarding transfer or
conveyance of such property by the following categories of persons:
(a) Vendors with imperfect title who cannot or do not want to execute
registered deeds of conveyance.
(b) Purchasers who want to invest undisclosed wealth/income in immovable
properties without any public record of the transactions. The process
enables them to hold any number of properties without disclosing them as
assets held.
(c) Purchasers who want to avoid the payment of stamp duty and
registration charges either deliberately or on wrong advice. Persons who
deal in real estate resort to these methods to avoid multiple stamp
duties/registration fees so as to increase their profit margin.
20. Whatever be the intention, the consequences of SA/GPA/WILL transactions
are disturbing and far-reaching, adversely affecting the economy, civil
society and law and order. Firstly, it enables large-scale evasion of
income tax, wealth tax, stamp duty and registration fees thereby denying
the benefit of such revenue to the Government and the public. Secondly,
such transactions enable persons with undisclosed wealth/income to invest
their black money and also earn profit/income, thereby encouraging
circulation of black money and corruption.
21. These kinds of transactions have disastrous collateral effects also.
For example, when the market value increases, many vendors (who effected
power of attorney sales without registration) are tempted to resell the
property taking advantage of the fact that there is no registered
instrument or record in any public office thereby cheating the purchaser.
When the purchaser under such "power of attorney sales" comes to know about
the vendor's action, he invariably tries to take the help of musclemen to
"sort out" the issue and protect his rights. On the other hand, real estate
mafia many a time purchase properties which are already subject to power of
attorney sale and then threaten the previous "power of attorney sale"
[pic]purchasers from asserting their rights. Either way, such power of
attorney sales indirectly lead to growth of real estate mafia and
criminalisation of real estate transactions."
15. Further a three Judge Bench of this Court in Suraj Lamp &
Industries Pvt. Ltd.(2) vs. State of Haryana & Anr., (2012)
1 SCC 656, considered the validity of such SA/GPA/WILL transaction and
observed thus:
"23. Therefore, an SA/GPA/WILL transaction does not convey any title nor
creates any interest in an immovable property. The observations by the
Delhi High Court in Asha M. Jain v. Canara Bank, (2001) 94 DLT 841, that
the "concept of power-of-attorney sales has been recognised as a mode of
transaction" when dealing with transactions by way of SA/GPA/WILL are
unwarranted and not justified, unintendedly misleading the general public
into thinking that SA/GPA/WILL transactions are some kind of a recognised
or accepted mode of transfer and that it can be a valid substitute for a
sale deed. Such decisions to the extent they recognise or accept
SA/GPA/WILL transactions as concluded transfers, as contrasted from an
agreement to transfer, are not good law.
24. We therefore reiterate that immovable property can be legally and
lawfully transferred/conveyed only by a registered deed of conveyance.
Transactions of the nature of "GPA sales" or "SA/GPA/WILL transfers" do not
convey title and do not amount to transfer, nor can they be recognised or
valid mode of transfer of immovable property. The courts will not treat
such transactions as completed or concluded transfers or as conveyances as
they neither convey title nor create any interest in an immovable property.
They cannot be recognised as deeds of title, except to the limited extent
of Section 53-A of the TP Act. Such transactions cannot be relied upon or
made the basis for mutations in municipal or revenue records. What is
stated above will apply not only to deeds of conveyance in regard to
freehold property but also to transfer of leasehold property. A lease can
be validly transferred only under a registered assignment of lease. It is
time that an end is put to the pernicious practice of SA/GPA/WILL
transactions known as GPA sales."
16. According to respondent, on 29.4.2004 his father Lekh Raj
Kukreja, who was the then Power of Attorney holder has submitted an
application for conversion of the said property from leasehold to freehold
and deposited the conversion charges of Rs.18,55,347/- and also deposited
further sum of Rs.27,222/- towards enhanced ground rent as demanded by the
DDA. It was submitted that alongwith the application all necessary
documents i.e. an Agreement to Sell, General Power of Attorney and copy of
the judgment in CS (OS) No. 2777/1989 dated 30.03.2001 were submitted
to the DDA. Even though the said application was filed way back in 2004,
it is not known as to why the respondent and his father Lekh Raj Kukreja
did not follow up the matter within a reasonable time and they have
approached the High Court only in the year 2009.
17. 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, 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.
18. In Director of Settlements, Andhra Pradesh and Ors. vs. M.R.
Apparao and Anr., (2002) 4 SCC 638, while considering the scope of the
power of High Court to issue a writ of mandamus under Article 226 of the
Constitution, this Court has held as under:
"17. ....It is, therefore essentially, a power upon the High Court for
issuance of high prerogative writs for enforcement of fundamental rights as
well as non-[pic]fundamental or ordinary legal rights, which may come
within the expression "for any other purpose". The powers of the High
Courts under Article 226 though are discretionary and no limits can be
placed upon their discretion, they must be exercised along the recognised
lines and subject to certain self-imposed limitations. The expression "for
any other purpose" in Article 226, makes the jurisdiction of the High
Courts more extensive but yet the Courts must exercise the same with
certain restraints and within some parameters. One of the conditions for
exercising power under Article 226 for issuance of a mandamus is that the
Court must come to the conclusion that the aggrieved person has a legal
right, which entitles him to any of the rights and that such right has been
infringed..."
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. In our considered view, 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 and the appeal deserves to be allowed.
19. In the result, the impugned order is set aside and the appeal
is allowed. The respondent is at liberty to pursue the matter with DDA in
accordance with law. Respondent is also at liberty to seek for return of
money deposited by him/his father-Lekhraj Kukreja and when such application
is made for return of money, the appellant/DDA is directed to return the
same with 10% interest. No order as to costs.
.........................J.
(V. Gopala
Gowda)
.........................J.
(R. Banumathi)
New Delhi;
March 24, 2015