IMPORTANT POINT
A mistake is not a fraud. It may be discovered and in a given case it must be pleaded.

Headnote:Delhi Development Act, 1957-Sections 22 and 56-Delhi Development Authority (Disposal of Developed Nazul Land) Rules, 1981-Rule 23-Lease of Nazul lands in favour of Cooperative Society known as Government Servants Cooperative House Building Society Ltd.-A statutory sub- lease executed in respect of residential plot-Lessor was entitled to recover a portion of unearned increase in the value i.e. difference between the premium paid and, market value of residential plot at the time of sale -Determination of lessor in respect of market value therefor was to be final and binding-Price of land in Vasant Vihar area determined at Rs.10,500/- per sq. meter-Respondent 1 filed an application before competent authority for sale of leasehold property indicating cost of construction and price of plot as Rs 5,00,00,000/-Appellant demanded a sum of Rs. 3,62,44,420/- as a condition for grant of permission-Writ petition questioning the said demand-Resolution passed by DDA to the effect that unearned increase should be worked out on basis of sale consideration shown in agreement of sale-Adoption of a purported policy dated 28-6-1999 in terms whereof leasehold was sought to be converted into freehold-One R permitted to execute sale deed by paying only conversion charges-Respondents claiming entitlement to be treated similarly.
       Held : It is not in dispute that the grant of lease or sub-lease is in consonance with the provisions of the D.D.A. Act and the rules framed thereunder. The sub-lease had been executed in Form B . Delhi was an Union Territory. It used to be governed by the Chief Commissioner on behalf of the Governor General in Council. The Chief Commissioner is now designated as the Lt. Governor. Delhi has now also become a Part B State. The authority of the Lt. Governor, therefore, is to be exercised by the Delhi Administration but such an authority being delegated one, the Union of India cannot be said to have denuded of its power to issue statutory directions as and when necessary or to issue policy decision in terms of the said Act or the rules. The power to fix market value is that of the lessor. Whereas the Chief Commissioner has been delegated with the power of the lessor, he in terms of clause X(a)(b) of the deed of sub-lease cannot sub delegate the same to any officer or officers to exercise such power. When a market value is fixed in case of a locality by the lessor or his delegated authority, the same would be binding on them. Although the sub-lease is a statutory one, the rules provide for suitable modifications. In terms of Rule 23, the terms and conditions of the sub-lease shall as nearly as circumstances permit be in accordance with Forms A and B . The lessor or lessee, therefore, not only could have agreed to vary the terms and conditions, any unilateral action taken by the lessor and accepted by the lessee cannot be questioned as they are not imperative in character. From a perusal of the order dated 24.6.1992, it appears that the practice of fixation of such market value for the purpose of recovery of unearned increase had been in vogue for a long time. (Paras 24 and 25)
       The Appellants proceeded on the premise in the case of the Respondents, that the Circular letters issued by it or the Union of India need not be given effect to and the valuation of the land should be worked as Rs. 7,50,00,000/- for the purpose of computing the unearned increase. However, it must be presumed that the vendees proceeded on the basis that the amount of unearned increase would be determined in terms of the said circulars. Furthermore, 50 of the unearned increase was to be paid to the Appellant as a condition of lease. While determining the amount, the Appellant was required to take into account the amount of consideration specified in the agreement and/or clearance certificate issued by the Income Tax Officer. They even did not do so. (Para 47)
       The respondents complied with the order of the High Court whereas Rajeev Gupta did not. Having regard to the subsequent events, he got the benefit of 1999 Circular and as indicated hereinbefore, the D.D.A. ignoring the fact that he was a power of attorney-holder and had already entered into possession and, thus, clause 6(b) stood attracted. It may be true that by such an action, the respondents herein stood discriminated. (Para 50)
       The respondents herein are victims of situation. Stricto sensu they cannot take advantage of the order passed by the High Court. The High Court gave them opportunities to get their deed registered. They could have refused to do so and in that event like Rajeev Gupta they were not required to deposit the amount. The parties did not contemplate that the Central Government would come out with another policy decision, which would be more beneficial to the sub-lessee. A fortuitous circumstance like the issuance of the said circular dated 28.6.1999 was not in contemplation. The appellant, therefore, cannot keeping in view the prospective effect given to the said circular, take any benefit thereof. Furthermore, they have not filed any application to amend their writ petition. They merely have urged additional grounds. It is no doubt true that this Court can take into consideration subsequent events and mould relief accordingly but thereby it cannot substitute a new relief based on a fresh cause of action. We are, therefore, of the opinion that the interim order passed by the High Court does not come to the aid of the respondents. (Para 51)
       In the facts and circumstances of this case, we are of the opinion that grant of 9 interest shall meet the ends of justice. We, therefore, while dismissing the appeals direct that in stead and place of 18 interest, the appellant shall be liable to pay interest @ 9 per annum. The amount payable to the respondents must be paid within a period of six weeks from this date together with interest failing which the respondents would be entitled to claim 18 interest on the expiry of the said period till actual payment is made. (Para 57)

JUDGMENT

S.B. Sinha, J.-These appeals involving common questions of law and fact were taken up for hearing together and are being disposed of by this common judgment.

BACKGROUND FACTS :

2. The admitted facts are : the lands in question being Nazul lands are governed by the provisions of the Delhi Development Act, 1957 (The Act) and the Delhi Development Authority (Disposal of Developed Nazul Land) Rules, 1981 (The Rules) framed thereunder. Pursuant to or in furtherance of the provisions of The Act and The Rules , the appellant herein granted lease in favour of a Cooperative Society known as the Government Servants Cooperative House Building Society Limited, Shri Mangal Singh Monga, Shri N.R. Pillai and Shri Satish Chander Malhotra were the members of the said Cooperative Society. They in terms of the provisions of The Rules were required to execute deeds of sub-lease in favour of the lessee as also the President of India.

3. The factual matrix of the matter is being considered from the case involved in Civil Appeal No. 1781 of 2000.

On 13.12.1968, a statutory sub-lease was executed in favour of Shri Mangal Singh Monga in respect of residential plot of 1568 sq. yards in Vasant Vihar on payment of Rs. 17560/- towards premium and Rs. 26656/- towards the cost of development. In terms of proviso appended to sub clause (b) of clause 6 of the dead of sub lease, the lessor was entitled to recover a portion of the unearned increase in the value i.e. "the difference between the premium paid and the market value of the residential plot at the time of sale". Determination of the lessor in respect of the market value therefor was to be final and binding.

4. By reason of clause X(a), of the said deed the President delegated his power to the Chief Commissioner of Delhi who is now the Lt. Governor of Delhi. The said Mangal Singh Monga died on 13.11.1983. Purported to be in exercise of such delegated power, the Delhi Administration fixed the market price of the nazul lands situated in different localities for the purpose of recovery of increase in the cost of the land upon sale for the periods from 1.4.1988 to 31.3.1990, 1.4.1990 to 31.3.1991 and 1.4.1991 to 31.3.1992 in terms whereof the price of the land in Vasant Vihar area was determined at Rs. 10500/- per sq. metre. Admittedly, the said circular letter was communicated to the concerned officers. Although there appears to be some notings in the file by some officers to the effect that actual market value of the land should be recovered from the parties but it does not appear that any concrete decision was taken in that behalf. Respondent No. 1 herein being heir of the original sub lessee entered into an agreement for sale with Respondent Nos. 8 and 9 wherein the amount of consideration was shown as Rs. 5,00,00,000/-. The proposed purchaser, however, besides the said amount and other expenses also agreed to bear 50 of the amount towards unearned increase. The Income Tax Department also granted a No Objection Certificate on or about 12.5.1994 showing the consideration of Rs. 5,00,00,000/- in respect of the plot in question. Respondent No.1 herein thereafter filed an application before the competent authority of the Appellant on or about 23.5.1994 for sale of the leasehold property indicating the cost of construction and price of the plot as Rs. 5,00,00,000/-.

5. The Government of India, however, without enforcing any increase in the sale price of the land extended the validity of the land rates in force till 31.3.1992 for a further period from 1.4.1994 to 31.3.1996 by a circular letter dated 11.11.1994. The appellant herein despite the same proceeded on the basis that having regard to the fact that the purchaser had agreed to pay the consideration of Rs. 5,00,00,000/- and further agreed to bear the cost of difference in unearned increase, the market value of the land would be Rs. 7,50,00,000/- and on that basis demanded a sum of Rs. 3,62,44,420/- as a condition of grant of permission by a d

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2003 Supreme(SC) 1255

IMPORTANT POINTA mistake is not a fraud. It may be discovered and in a given case it must be pleaded.

Cases Referred (7)

IMPORTANT POINT
A mistake is not a fraud. It may be discovered and in a given case it must be pleaded.