$~57 * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 18th December, 2024 + W.P.(C) 17407/2024 & CM APPLs. 74083-74084/2024 THE KHETRI TRUST .....Petitioner Through: Mr. Ravi Gupta, Senior Advocate with Mr. Ishaan Verma, Ms. Diviani K. Verma, Ms. Muskaan Mehra and Mr. Shrey Sharma, Advocates.

versus UNION OF INDIA & ANR. .....Respondents Through: Mr. Rajesh Gogna, CGSC with Mr.

Nipun Jain, Mr. Aakash Meena and Ms. Priya Singh, Advocates for R-1 & 2.

CORAM:

HON'BLE MR. JUSTICE SANJEEV NARULA

JUDGMENT

SANJEEV NARULA, J. (Oral):

1. The Petitioner impugns demand letter dated 12^th June, 2024,, [“the impugned order”] issued by the Land and Development Office,, [“L&DO”] Respondent No. 2, demanding an amount of INR 4,34,92,8121/- towards Unearned Increase. This demand arises from Petitioner’s request to substitute the original lessee qua the leasehold property bearing No. 5, Sardar Patel Marg, New Delhi,, [“the subject property”] in the records of L&DO.

2. A brief background leading to the filing of the present petition is as Signature Not Verified

Digitally Signed

W.P.(C) 17407/2024 Page 1 of 12 follows:

2.1. A perpetual lease deed was executed on 24^th April, 1962 in respect of the subject property in favour of Raja Bahadur Sardar Singh of Khetri. Later, by a registered a Will dated 30^th October, 1985 he created “The Khetri Trust”, bequeathing his assets including the subject property, for charitable purposes. Upon the demise of Raja Bahadur Sardar Singh of Khetri on 28^th January, 1987, the Will came into effect.

2.2. Legal complexities ensued when, on 3^rd July, 2012, this Court initially dismissed a probate petition [Testamentary Case No. 26/1987] which was filed to prove the Will. However, the Division Bench on 11^th July, 2023 reversed the Single Judge’s ruling and granted probate in favour of Lord Northbrook, the surviving executor of the estate. While the State of Rajasthan has appealed this decision before the Supreme Court [SLP(C) Diary No. 45720/2023], no stay has been granted, leaving the probate order fully operative.

2.3. In the above background, on 23^rd October, 2023, Petitioner filed an application with L&DO for substitution of its name in place of the Raja Bahadur Sardar Singh of Khetri, relying upon the judgment dated 11^th July, 2023. The said request was allowed and conveyed to the Petitioner through communication dated 9^th April, 2024.

2.4. Subsequently, L&DO issued the impugned order raising a demand towards Unearned Increase for an amount of INR 4,34,92,812/- in respect of the Petitioner’s application for substitution.

2.5. Aggrieved by the said order, Petitioner made multiple representations to L&DO and was provided with an opportunity of personal hearing, however, Respondent No. 2 refused to withdraw the impugned order.

Signature Not Verified Digitally Signed W.P.(C) 17407/2024 Page 2 of 12

3. Mr. Ravi Gupta, Senior Counsel for Petitioner, urges that the impugned demand is arbitrary and untenable in law and makes the following submissions:

3.1. The Will in question is genuine which expressed the desire of the testator to bequeath the property in favour of the Petitioner-Trust. It is not a case where the leasehold property has sought to be transacted under the disguise of a testamentary succession i.e. the Will. The transfer of a property by way of a Will, even to a third party, cannot be subject to Unearned Increase when a Will is genuine. To support his contentions, he places reliance on the decision of this Court in Lala Diwan Chand Trust v.

NDMC.

3.2. Reliance is also placed on the decision in DDA v. Shanti Swaroop Goyal, [2012:DHC:4603-DB] to contend that once the mutation has been effected, L&DO could not have raised the demand of Unearned Increase.

3.3. The impugned demand has been calculated on the market value of 2023/2024 instead of 1987 which is when the bequest became effective and the Petitioner-Trust was created as per the Will.

4. Per contra, Mr. Rajesh Gogna, CGSC for Respondents No. 1 and 2, places reliance o