Pradeep Nandrajog, J.

1. The year 1947 was of momentous events in the history of this country.

It was the year of the great divide. The country gained freedom but at a heavy price. ft was partitioned. An independent sovereign state, Pakistan was created. As a result of partition there was large scale migration. From the territories which remained in India, muslim population migrated to Pakistan. Hindus who had their homes in the territories which went to Pakistan migrated to India. There was a massive influx of the refugee population across the two borders. In large numbers, the migrant population which moved from Pakistan reached the city of Delhi. The city started expanding in geometrical proportion. Land was required for housing, industrial and commercial use. The Large Scale Acquisition Policy of 1961 was framed in Delhi. The policy envisaged allotment of land at pre-determined rates. The idea was to prevent unplanned growth of the city and provide land at reasonable prices to the migrant population.

2. In 1957 the Delhi Development Act was promulgated. The Act as originally framed, empowered DDA to acquire land and develop the same as per planned development of Delhi. Thereafter, power of DDA to acquire the land was taken away. As amended, at the request of DDA, Central Government would acquire lands and place the same at the disposal of DDA.

The Delhi Development Authority (Disposal of Developed Nazul Land) Rules 1981 were framed. By virtue of Section 22 of Delhi Development Act, land which was placed at disposal of DDA was to be utilised by it as per directions of the Central Government. Additionally, utilisation of the land was as per the Nazul Land Rules, 1981.

3. Since land was allotted at pre-determined rates (not on market rates) perpetual leases were executed. The form of the lease was statutorily prescribed by the N azul Land Rules. All leases had a clause to the effect that in case the perpetual lessee transfers the lease hold rights the lessor was entitled to recover up to 50% unearned increase in the value of the land.

Prior permission had to be taken before transfer.

4. Who likes to be shackled? Much less trade and business. Restrictive covenants are disliked in a free economy. People found a way out to circumvent the restrictive covenant in the perpetual lease deeds. The way out found was to transfer possession of the land to a general attorney who, by virtue of an irrevocable power of attorney was vested with the power to possess the land and utilise the same in whatever manner he felt like, including power to let out the land or building, appropriate the rent with further power to sub-delegate his authority. It was nothing but a sale.

5. Taking cognizance of the ground realities, the Central Government _ thought that it would be better to regularise what had happened. It decided that while regularising what had happened, coffers of the government be enriched. A scheme of conversion from leasehold system of land tenure into freehold was brought into force and notified by the Government.

6. In a nutshell, as per the scheme, lands held as lease-hold tenure were permitted to be converted into freehold on payment of a levy. This levy was called conversion charges. Inter alia, Clauses 1.16 and 1.17 of the policy stipulated as under:"

1.16 In cases where applications for mutation and substitution is pending with the lessor, conversion would be allowed only after necessary mutation/sanction has been carried out.

1.17. The conversion shall also be allowed in cases where lessee/sublessee/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 to alienate sell/transfer the property.

(b) Proof is given of possession of the property in favour of the person whose name conversion is being sought.

In such cases, a surcharge of 33.1/3% on the conversion fee would be payable over and above the one time conversion ch