Delhi District Court
Sh. Nilender Prakash vs Union Of India on 28 February, 2017
IN THE COURT OF MS. REKHA: ADDITIONAL DISTRICT
JUDGE :NEW DELHI DISTRICT, PHC, NEW DELHI
Civil Suit No. 56871/16
Sh. Nilender Prakash
S/o late Sh. Pandit K.L. Punj
R/o 10, Prithviraj Road,
New Delhi ......................... Plaintiff
Versus
1. Union of India
Through its Secretary,
Ministry of Urban Development and Poverty Alleviation.
Land Development Office,
Nirman Bhawan,
New Delhi110001
2. Dy. Land an Development Officer
Ministry of Urban Development and Poverty Alleviation.
Land Development Office,
Nirman Bhawan,
New Delhi110001
3. Punj Sons (P) Ltd.
M13, Connaught Place,
New Delhi ................ Defendants
DATE OF INSTITUTION: 25.03.2008
DATE OF DECISION: 28.02.2017
JUDGMENT :
1. Vide this judgment I proceed to dispose of the suit for
Nilender Prakash Vs. Union of India & Ors. 1
recovery of Rs. 51,25,052/ (Rupees Fifty One Lacs Twenty Five
Thousand Fifty Two only) alongwith pendentalite and future interest.
Through this suit it has been prayed that a decree for recovery of Rs.
51,25,052/ (Rupees Fifty One Lacs Twenty Five Thousand Fifty Two
only) alongwith pendentalite and future interest @ 18% per annum and
cost of the suit and any other relief which this court deem fit and proper
may be passed in favour of plaintiff and against the defendant no. 1 and
2. The brief facts in narrow compass, relevant and necessary for the
disposal of the present suit are that present suit has been filed by the
plaintiff through his attorney Sh. Arun Krishna Srivastava who is duly
authorized by the plaintiff vide Attorney dated 07.03.2008. As per the
case and evidence of the plaintiff, property bearing No. CC30, Kalkaji,
New Delhi (hereinafter referred as property) was initially alloted by the
defendant no. 1 and 2 to Sh. Des Ram Dhingra S/o Sh. Devi Das
Dhingra by way of perpetual Lease Deed dated 21.02.1957 in his favour
and Sh. Des Ram Dhingra on account of bonafide requirements,
transferred all his rights, title and interest in the said property by way of
Nilender Prakash Vs. Union of India & Ors. 2
Deed of Conveyance dated 07.09.1964 in favour of M/s Punjsons Pvt.
Ltd., a company incorporated under the Companies Act which was
subsequent to the approvals of the defendant no. 1 and 2 and
consequently the Conveyance Deed was executed and duly registered in
favour of the M/s Punjsons Pvt. Ltd. and the possession of the property
was delivered to M/s Punjsons Pvt. Ltd. It is also stated that M/s
Punjsons Pvt. Ltd. formed part of Punj Group initially constituted by Pt.
Kanhaiya Lal Punj and his seven sons including the plaintiff and the
Punj Group was carrying businesses in the nature of partnership under
various names. It is also stated that certain disputes arose amongst Punj
Group were referred to the Arbitrator namely Sh. S.C. Mathur and a
settlement was arrived which culminated in the award dated 5/6 August,
1987 and the said award was made rule of the court. It is also stated
that in the year 1989 further disputes arose interse four brothers which
constituted group II and the said disputes were once again referred to the
same arbitrator and again matter was negotiated and a settlement was
arrived between the parties which culminated in award dated 15th
Nilender Prakash Vs. Union of India & Ors. 3
November, 1989 and the said award was also become rule of the Court
vide order dated 30th May, 1997 after the objections filed by one brother
namely Sh. S.N.P. Punj and his family members, were dismissed and the
appeal field by Sh. S.N.P. Punj and Ms. Arti Singh, interalia,challenging
the order dated 30th May, 1997 has already been dismissed. It is also
stated that in view of the family settlement arrived at amongst the parties
and the parties amicably agreed to separate their businesses and
property which was held in the name of M/s Punjsons Pvt. Ltd. fell to the
share of plaintiff under the Award dated 15th November, 1989 and
businesses as well as the properties which fell to the shares of different
parties were at 'Nil' Value. No consideration has been paid for transfer of
shares or properties in whose favour it fell under the awards and it did
not constitute a transfer or a sale much less against certain consideration
which could attract unearned increase. It is also stated that the due to
differences amongst the members of Punj Group, the property remained
vacant. After the property fell to the share of the plaintiff consequent to
the award dated 15th November, 1989, the plaintiff applied for recalling
Nilender Prakash Vs. Union of India & Ors. 4
of reentry to defendant No. 1 and 2 and the defendant No. 1 and 2 in
reply to that application gave their terms and in compliance of terms, the
plaintiff deposited a sum of Rs.30,05,064/ vide cheque No. 714148
dated 03.12.1999 drawn on Punjab National Bank, Nehru Place, New
Delhi alongwith an undertaking to the defendants, interalia,agreeing to
remove breaches by 31.03.2000 or get them regularized beyond
31.03.2000 on payment of such charges which may be levied by the
defendants. Reentry orders were withdrawn in respect of probate and
property was restored in the name of Punjsson Pvt. Ltd. by the defendat
vide letter dated 22.02.2000. It is also stated that the defendants vide
letter dated 09.04.2002 demanded a sum of Rs.3,96,353/ for extending
the time for raising construction and the plaintiff deposited the said
amount with the defendant no. 1 and 2 vide cheque dated 20th April,
2002. Subsequently, the defendant extended the time for construction
upto 30.09.2002. It is also stated that subsequent to No Objection
Certificate of the defendant no. 1 and 2, the plaintiff raised the
construction as per the plans sanctioned by MCD and the plaintiff also
Nilender Prakash Vs. Union of India & Ors. 5
applied for completion certificate to MCD which was received on
02.07.2004. Copy of the same was submitted to defendant No. 1 and 2.
It is also stated that pursuant to the policy of the defendants, the plaintiff
applied for conversion of the property vide application bearing No. 7694
from leasehold to freehold in November 2004. The plaintiff deposited a
sum of Rs. 8.22 lacs in accordance with guidelines mentioned in
brochure. The plaintiff also submitted indemnity bond and undertaking in
the requisite form. It is also stated that the defendants did not process
the application of the plaintiff for conversion of property and raised
objections vide letter dated 7th December, 2004 objecting that since the
property was not mutated in the name of the plaintiff, therefore, it could
not be converted from leasehold to freehold and the plaintiff perforce
complied with the same and applied for mutation for the purpose of
conversion of the demised property form leasehold to freehold. It is also
stated that vide letter dated 17th February, 2005, the defendants
demanded a sum of Rs. 37,40,594/ which included a sum of Rs.
33,27,956/ towards 50% unearned increase and the defendants vide
Nilender Prakash Vs. Union of India & Ors. 6
aforesaid letter threatened that in case the said amount is not deposited
within 30 days, application for mutation filed by the plaintiff shall stands
closed and the conversion application shall also stand rejected without
any further reason and further threatened that in addition to above, the
plaintiff shall be liable to pay interest @ 10% per annum on the total dues
from the date of issues of the said letter. It is also stated that the plaintiff
was not liable to pay unearned increase. As per the conversion policy of
the defendant no. 1 and 2, even purchasers, by way of agreement to sell
and power of attorney, were entitled to have the property converted and
no unearned increase much less 50% was payable. It is also stated that
there was no transfer of property from M/s Punjsons Pvt. Ltd. to plaintiff
in much as under negotiated settlement, the suit property fell to the share
of plaintiff and the plaintiff had not paid any amount as consideration. It
could not constitute sale or transfer of rights against which would attract
unearned increase. It is also stated that there was no breach of terms of
the lease inasmuch as penalties levied by defendants from time to time
were deposited and breaches removed/regularized. It is also stated that
Nilender Prakash Vs. Union of India & Ors. 7
as per policy of the defendants where the lessee or sublessee had
applied for sale permission and the unearned increase had not been
levied or paid, application for sale was to be treated as infructuous and
conversion was allowed by the defendants. So much as, unearned
increase deposited by any lessee or sublessee or buyer, in the absence
of registration of a sale deed where application was found in possession,
was liable to be refunded. It is also stated that as per the policy of the
defendants, even power of attorney transactions were recognized without
payment of unearned increase and even mutation was not insisted upon
in case of proof of possession and an application to convert the property
with conversion charges. As per policy, since the plaintiff was in
possession of the property and had applied for conversion with the
requisite conversion charges, no unearned increase could have been
levied. It is also stated that defendants threatened to reject the
application for conversion, hence the plaintiff vide letter dated 14th
March, 2005 without prejudice to his right to seek refund, deposited Rs.
37,40,594/. It is also stated that the defendants vide letter dated
Nilender Prakash Vs. Union of India & Ors. 8
23.03.2005 mutated the property in favour of the plaintiff and the
defendants no. 1 and 2 asked Indemnity Bond which was furnished by
the plaintiff and property was converted from lease hold to free hold and
a conveyance deed dated 01.04.2005 was execued in faour of the
plaintiff i.e. Sh. Nilender Prakash Punj which is duly registered with the
concerned SubRegistrar. It is also stated that since the plaintiff was not
liable to pay the unearned increase, therefore, vide letter dated 19th
May, 2007 called upon the defendants to refund the said amount with
interest @ 18% per annum but the defendant despite the said demand,
failed to refund the amount demanded, hence liable to refund the said
amount alongwith interest @ 18% per annum and the defendant is also
liable to pay a sum of Rs. 17,97,096/ towards interest for the period 14th
March, 2005 till institution of the suit. It is also stated that the plaintiff
also got notice dated 19.05.2007 served upon the defendants . It is also
stated that in addition, the plaintiff also got the notice/intimation sent to
the Govt. of India on 10th March, 2008 alongwith copy of notice dated
19.05.2007. In the fact and circumstances of the case, present suit has
Nilender Prakash Vs. Union of India & Ors. 9
been filed.
2. The defendants no. 1 and 2 contested the present suit and filed
the Written Statement in which allegations levelled in the suit have been
denied and took certain preliminary objection that the present suit is
barred by limitation and there is no cause of action in favour of the
plaintiff and against the answering defendants, hence the suit is liable to
be dismissed. It is also stated that the plaintiffSh. N.P. Punj had applied
for mutation on the basis of 'Awards' arrived at in their family settlement.
The application on the basis of Awards was decided and it was treated
as 2nd transfer since the property stood in the name of M/s Punj Sons
Pvt. Ltd. Hence, unearned increase was recovered in accordance with
the terms of lease deed. It is also stated that after recovery of unearned
increase, in accordance with the relevant policy, mutation was carried out
on 28.03.2005. It is also stated that while depositing the amount of
unearned increase, the plaintiff had never raised any such objection and
after recovery of all govt. dues and completion of formalities applicable in
such case, the said property was converted into freehold on 01.04.2005,
Nilender Prakash Vs. Union of India & Ors. 10
as per the application itself. It is also stated that the plaintiff after getting
his property converted into freehold on 01.04.2005, for the first time, after
a lapse of about two years represented against the demand of unearned
increase through Sh. Naresh K. Thanani, Advocate on 22.5.2007 and a
reply dated 01.04.2008 has been sent to the advocate explaining the
details including that Sh. N.P. Punj applied for mutation on the basis of
'Awards' arrived at in their family settlement and request of mutation on
the basis of 'Awards' was acceded to which was treated as 2nd transfer
and the applicant was liable to pay 50% unearned increase and
enhanced ground rent as per clause (C) and (d) of the Lease Deed.
Accordingly a demand of Rs. 33,27,956/ towards 50% unearned
increased was issued on 17.02.2005 which was duly paid by the
applicant without any protest, therefore, it was informed that there is no
question of refund of unearned amount paid by his client as the same
was charged as per the terms of the lease deed and in accordance with
the relevant policy of the department. It is also stated that the plaintiff has
no right to agitate about the issue of unearned increase after a lapse of
Nilender Prakash Vs. Union of India & Ors. 11
about 3 years when the said property was converted into freehold in
accordance with the extant policy of the department without prejudice to
its rights and contentions. It is also stated that the property in question
was originally lease out to Sh. Des Raj Dhingra S/o Sh. Devi Das vide
lease deed executed on 21.02.1957 by the then Ministry of Rehabilitation
and further the property was sold to M/s Punj Sons Private Ltd. vide Sale
Deed registered on 25.09.1964 It is also stated that in the present case,
the property has been mutated in the name of the individual from a
company on the basis of Award where the answering defendants were
not even party to any such proceedings. It is also stated that this is a
case of transfer from a company to an individual which was treated as
2nd transfer in terms of the relevant provisions of the lease deed
executed in respect of the said property. It is also stated that in
accordance with the clause (c) & (d) of the lease deed the plaintiff is
liable to pay 50% unearned increment and enhanced ground rent to the
Government. It is also stated that as per clause 1 (ii), of the lessee was
required to construct the building within 2 years from the date of
Nilender Prakash Vs. Union of India & Ors. 12
commencement of the lease i.e. 21.02.1957 and accordingly, the
construction was to be completed by 21.02.1959 but the lessee did not
construct the building and even by 31.12.1968, hence a show cause
notice was issued on 27.02.1969. Then the lessee vide letter dated
25.03.1969, requested to change the use of plot from residential to
commercial and after deliberations, the DDA rejected the request of
plaintiff to change the land use of the plot from residential to commercial
and since the then lessee failed to construct the building, the property in
question was reentered on 15.05.1973 and same was communicated to
exlessee i.e. M/s Punj Sons Ltd. vide letter dated 06.06.1973. It is also
stated that the exlessee M/s Punj Sons (P) Ltd. vide letter dated
20.11.1986 requested to offer terms and conditions for withdrawal of re
entry orders. Sh. N.P. Punj vide letter dated 19.07.1991 submitted
certain documents for carrying out mutation on the basis of award and
requested for vacation of reentry orders. The terms for withdrawal of re
entry orders were issued on 21.10.1999 and the plaintiff represented
against the terms vide letter dated 05.11.1999.The request for plaintiff
Nilender Prakash Vs. Union of India & Ors. 13
was considered and it was found that plaintiff has to pay an amount of
Rs. 30,05,064/ towards penalty for belated construction w.e.f.
01.01.1969 to 31.12.2000, damages for unauthorized construction and
ground rent. On receipt of payment, reentry order was withdrawn vide
letter dated 22.02.2000 and property was restored to M/s Punj Sons (P)
Ltd. and No Objection Certificate was issued to M/s Punj Sons (P) Ltd. by
this office on 24.03.2000 for sanctioning of the building plan by the local
body. Since the construction was not completed within the stipulated
period and further NOC was again issued on 03.05.2002. after recovery
of penalty of Rs. 3,00,137/ for belated construction w.e.f. 01.01.2001 to
31.09.2002 alongwith damage charges and ground rent as demanded
vide this office letter dated 09.04.2002. It is also stated that the N.P.
Punj had applied for conversion of leasehold rights into freehold on
21.05.2004 and the plaintiff was informed by the answering defendants
vide letter dated 07.12.2004 that he is not the recorded lessee and
accordingly, the conversion could not be allowed in his name, hence he
was not recorded lessee and hence, the plaintiff had applied for mutation
Nilender Prakash Vs. Union of India & Ors. 14
to the answering defendants on the basis of awards and other
documents. It is also stated that the award was examined as per policy
of the answering defendants and the terms and conditions of the lease
deed and on the basis of Awards and other documents on the basis of
award and arbitration, it was going to an individual from the company,
and as per law, a company is legal person or legal entity separate from,
and capable of surviving beyond the life of its members. Hence it was
treated as second transfer and as per the clause (c) of the lease deed,
the plaintiff was liable to pay 50% earned increase. Accordingly, a
demand was issued on 17.02.2005 and a sum of Rs. 33,27,956/ was
issued on account of 50% unearned increase, Rs. 1,03,566/ towards
enhanced ground rent, a sum of Rs. 9/ towards towards short
conversion amount, Rs. 1/ towards interest on short conversion
amount, a sum of Rs. 23/ towards nominal ground rent and a sum of Rs.
3,11,464/ towards penalty for belated construction w.e.f. 01.10.2002 to
30.06.2004 and the plaintiff deposited a sum of Rs. 37,40,594/ on
16.03.2005 and the plaintiff never objected or raised any objection while
Nilender Prakash Vs. Union of India & Ors. 15
depositing the govt. dues and after recovery of the said amount, the
mutation was carried out in the name of the plaintiff on 28.03.2005 and
thereafter the property was converted into freehold vide conveyance
deed executed on 01.04.2005. There is also prayer for the dismissal of
the suit.
4. The defendant no. 3 also filed the written statement in which it is
stated that the plaintiff deposited the amount under the threat of the
defendant No. 1 and 2 and also corroborated the version of the plaintiff.
5. Replication filed on behalf of the plaintiff to the written statement
filed by the defendant no. 1 and 2 wherein contents of the plaint have
been reiterated and allegations levelled against him in Written Statement
have been denied. It is also stated that so far as mutation in the name of
the individual i.e. plaintiff from the company namely defendant no. 3 is
concerned, no consideration was exchanged inasmuch as under the
family settlement, the suit property fell to the share of plaintiff. It is also
stated that though the defendant No. 3 is a juristic entity, however, it had
been closely held company of the family members. Be that as it may
Nilender Prakash Vs. Union of India & Ors. 16
conversion of the property from leasehold to freehold was sought
pursuant to the policy of defendants No. 1 and 2. As per said policy,
defendant no. 1 and 2 could not have insisted for mutation or demanded
unearned increase.
6. From pleadings of parties following issues were framed:
i. Whether the plaintiff is entitled to recovery of a sum of Rs.
51,25,052/ paid towards unearned increase? OPP
ii. Whether the plaintiff is entitled to interest? If so, the rate
and period for which, it is payable? OPP
iii. Whether the suit is barred by limitation? OPD
iv. Whether the suit is not maintainable in view of alleged lack
of course of action?OPD
v. Reliefs.
7. To prove its case, plaintiff got examined Sh. Arun Kumar
Srivastava as Plaintiff Evidence1 (In Short PW1). He exhibited following
documents :
Sl. No. of Details of Documents
No. Exhibits
1 Ex. PW1/1 Photocopy of Power of Attorney dated 07th
March 2008
Nilender Prakash Vs. Union of India & Ors. 17
2. Ex. PW1/2 Receipt issued by the defendants against the
deposited dated 2nd May, 2002
3. Ex. PW1/3 Letter dated 17th February, 2005 received from
defendant
4. EX. PW1/4 Office copy of the receipt letter dated 19th May,
2007
5. Ex. PW1/5 Office copy of the notice dated 10th March, 2008
6. Ex. PW1/6 Speed Post and Registry Receipts
(colly)
7. Ex. PW1/7 Reply dated 1st April, 2008 received from the
defendants
8. MarkA Photocopy of perpetual Lease Deed dated 21st
February 1957
9. MarkB Photocopy of Conveyance Deed dated 7th
September, 1964
10. MarkC Photocopy of letter dated 9th April, 2002
10. MarkD Photocopy of letter dated 3rd May, 2002
extended time for construction upto 30th
September,2002
11. MarkE Photocopy of application bearing No. 7694
seeking conversion
12. MarkF Photocopy of challan whereby amount of Rs.
8.22 lacs was deposited
13. MarkG Photocopy of letter dated 7th December, 2004
issued by respondents
14. MarkH Office copy of the letter dated 14th March,2005
15. MarkI Photocopy of Memorandum dated 21st March, 2005
15. MarkJ Office copy of Memorandum dated 28.03.2005 Nilender Prakash Vs. Union of India & Ors. 18
16. MarkK Photocopy of conveyance Deed dated 01.04.2005
8. On the other hand, defendant No.1 got examined Sh. P.S. Oberoi as Defendant Evidence1 (In short DW1).
9. During the course of argument, ld. counsel for plaintiff argued that the present suit is very much within the limitation period and devolvement/acquisition of property/rights in the property was by virtue of the family settlement by no stretch can be said to be sale which would attract unearned increase to be paid by the plaintiff and at the time of mutation in the name of the plaintiff from the company namely defendant no. 3, no consideration was exchanged inasmuch as under the family settlement, the property fell to the share of plaintiff. It is also argued that that though the defendant No. 3 is a juristic entity, however, it had been closely held company of the family members. Ld .counsel also relied upon the following judgements (I) 2002 (100) DLT 370 titled "HR Vaish Vs. Union of India & Ors. (ii) 2003 (108) DLT 440 titled "Deepak Lamba Vs. Anr. Vs. DDA (iii) 2005 IV AD Delhi 329 (DB) titled "DDA Vs. Aditya Kumar Jajodia" (iv) 2012 (188) DLT 25 (DB) titled Union of India & Ors. Vs. Jor Bagh Association. On the other hand, it has been argued by ld. counsel for defendant that Nilender Prakash Vs. Union of India & Ors. 19 on the basis of award and arbitration, it was going to an individual from the company, hence, it was treated as second transfer and as per the clause (c) of the lease deed, the plaintiff was liable to pay 50% earned increase, hence the plaintiff was asked to deposit the unearned increased.
10. I have heard the arguments and perused the material available on record. The present suit is for recovery of Rs. 51,25,052/ alongwith interest filed by the plaintiff. Issuewise findings are as under: Issue No. 1: Whether the plaintiff is entitled to recovery of a sum of Rs. 51,25,052/ paid towards unearned increase? OPP AND Issue No. 2: Whether the plaintiff is entitled to interest? If so, the rate and period for which, it is payable? OPP Since both issues are interconnected, hence are being decided together. Onus to prove these issue were conferred upon the plaintiff and the plaintiff in order to discharge his onus examined Sh. Arun Krishna Srivastava as PW1 and also got exhibited Ex. PW1/1 to PW1/7 and MarkA to MarkK. As per the case and testimony of plaintiff, the plaintiff was part of the M/s Punjson Pvt. Ltd. which formed part of Nilender Prakash Vs. Union of India & Ors. 20 the Punj Group in whose name the property in question held in view of the Deed of Conveyance dated 07.09.1964 executed by Sh. Devi Das Dhingra S/o Sh. Devi Das Dhingra to whom the property in question was initially alloted by the defendant No. 1 and 2 through a Perpetual Lease dated 21.02.1957. It is also stated that the plaintiff and other six brothers amicably agreed to separate their business and the property in question fell in the share of the plaintiff vide award dated 15th November, 1989 which became rule of the court vide order dated 30.05.1997 after objections filed by Sh. S.N.P. Punj and his family members were dismissed and appeal filed by Sh. S.N.P. Punj and Ms. Arti Singh inter alia challenging the order dated 30th May, 1997 was also dismissed. It is also stated that the plaintiff deposited a sum of Rs. 30,05,064/ through cheque bearing No. 714148 dated 03.12.1999 and another Rs. 3,96,353/ for extending the time for raising the construction and the abovesaid amounts were duly deposited. Consequently, after receiving the No Objection Certificate from defendant no. 1 and 2, the plaintiff raised the construction and also applied for completion certificate from Nilender Prakash Vs. Union of India & Ors. 21 MCD which was received on 02.07.2004. It is also stated that the plaintiff applied for conversion of the property from leasehold to freehold but he was asked to get the property mutated in his name first before conversion. As such, the plaintiff applied for mutation the property in his name but vide letter dated 17.02.2005 the defendants asked a sum of Rs. 37,40,594/ which includes Rs. 33,27,956/ towards 50% unearned increase and the defendants also threatened the plaintiff that in case of nonpayment of the said amount his application for mutation as well as conversion shall stands closed/rejected. Hence, the plaintiff was constrained to deposited the same amount without prejudice to his right to seek the refund and subsequently, the property in question was mutated in the name of the plaintiff vide letter dated 23.03.2005 and the property was also converted from lease hold to free hold and a Conveyance Deed dated 01.04.2005 was also executed in favour of the plaintiff which was duly registered with the concerned Registrar. It is also stated that the plaintiff was not liable to pay any amount towards unearned increase as there was no transfer of property in question from Nilender Prakash Vs. Union of India & Ors. 22 Punj Sons Pvt. Ltd. to plaintiff in much as under negotiated family settlement, the property fell to the share of the plaintiff and the plaintiff had not paid any amount as consideration. So, it was neither transfer nor sale as it is without consideration.
On the other hand, as per the defence of the defendant No. 1 and 2, the defendants have rightly demanded a sum of Rs. 33,27,956/ towards 50% the unearned increase which was without any protest. It is also stated that Sh. N.P. Punj applied for mutation on the basis of Awards arrived at in their family settlement and the request of mutation on the basis of Awards was acceded to which was treated as 2nd transfer and applicant was liable to pay 50% unearned increase and enhanced ground as per clause (C) and (d) of the Lease Deed. It is also stated that the property has been mutated in the name of the individual from a company hence it was treated as 2nd transfer of the relevant provisions of the lease deed. In law, a company is a legal person or legal entity separate from and capable of surviving beyond the life of its members.
Nilender Prakash Vs. Union of India & Ors. 23 So far as factual position is concerned, it is not disputed that leasehold right of the property in question comes in favour of M/s Punjsons Pvt. Ltd. from Sh. Desh Raj Dhingra S/o Sh. Devi Dass by way of Deed of Conveyance dated 07.09.1964 and the plaintiff is claiming his right in respect of the property on the basis of family settlement as stated before. More so, mutation of the property in the name of the plaintiff from M/s Punjsons Pvt. Ltd. vide letter dated 23.03.2005 and the conversion of the property from leasehold to freehold and execution of Conveyance Deed dated 01.04.2005 in favour of the plaintiff are also not in dispute. Here it is relevant to pen down here that PW1 got MarkA i.e. photocopy of Lease Deed dated 21.02.1957 and clause B and C of the said Lease Deed are as under:
"(b) The Lessee shall before any assignment or transfer of the said premises hereby demised or any part thereof obtain from the Lessor approval in writing of the said assignment or transfer and all such assignees and transferees and the heirs of the Lessee shall be bound by all the covenants and conditions herein contained and be answerable in all respects therefor.
(c) The Lessee can transfer the land after obtaining the permission of the Lessor aforesaid and the Lessor will not share any unearned increment in the value of the land (being the difference in the premium paid by Nilender Prakash Vs. Union of India & Ors. 24 him to the Lessor and the market value of the land then prevailing) for permitting such transfer. The Lessor will, however, be entitled to claim and recover the unearned increment in the value of land in the event of any subsequent transfer of the land by a transferee the amount so to be recovered being 50% of the unearned increment in the value of the land."
In the case of any subsequent transfer the Lessor shall have the pre-emptive right to purchase the premises as hereby demised and all the buildings and structures standing thereon, after deducting 50% of the unearned increment as aforesaid. "
So after perusing the abovesaid clauseB (supra) of the lease deed, it is quite clear that lessee has to obtain approval in writing of the L&DO before any "assignment or transfer" of the leased premises.
Clause (c) supra of the Lease Deed entitled the L&DO to claim and recover unearned increase at the time of „transfer‟ subsequent to the first transfer‟.
So the question which required consideration here is that whether transfer of the property by M/s Punjsons Pvt. Ltd. in favour of the plaintiff comes within the meaning of aforesaid clause of the Lease Deed or not, in other words, it was a transfer subsequent to the first transfer. If answer is in affirmative then the plaintiff is liable to pay unearned increase as contended by the defendant No. 1 and 2.
Nilender Prakash Vs. Union of India & Ors. 25 It is relevant to pen down here that A Division Bench of this Court in New Delhi Municipal Council Vs. Ram Kishan Kulwant Rai & Sons MANU/DE/4961/2012, in the context of assessment of property tax of an immovable property, and relying on Western Coalfield Limited Vs. Special Area Development Authority, Korba (1982) 1 SCC 125 and Electronics Corporation of India Ltd. Vs. Secretary, Revenue Department, Government of Andhra Pradesh (1999) 4 SCC 458, held that (i) a company incorporated under the Companies Act has a corporate personality of its own, distinct from that of its shareholder; (ii) the lands and buildings are vested and owned by the company and the shareholders own only the shares; (iii) a company registered under the Companies Act is a legal person separate and distinct from its individual members; (iv) property of the company is not the property of the shareholders; (v) a shareholder has merely an interest in the company arising under its Articles of Association, measured by a sum of money for the purpose of liability and by a share in the profit; (vi) the mere fact that the entire share capital of a company may be contributed by the Central Nilender Prakash Vs. Union of India & Ors. 26 Government and the fact that all its shares were held by the President and certain officers of the Central Government did not make the company Central Government or the State for its income to be exempted from union taxation; (vii) even though a company may be controlled by the State Government, it has a separate entity than the State Government; (viii) a clear distinction must be drawn between a company and its shareholder, even though that shareholder may be only one; (ix) in the eye of law, a company registered under the Companies Act is a distinct legal entity other than the legal entity or the entities that hold its shares.
In the aforesaid state of law, it cannot be said that the change in the ownership / title to leasehold rights from M/s Punjsons Pvt. Ltd. to the plaintiff did not result in change of ownership / title to leasehold rights. Transfer is defined in Black‟s Law Dictionary, 8th Edition as any mode of disposing of or parting with an asset or an interest in an asset; Assignment is defined as transfer of rights or property.
It will not be out of place to mention here that PW1Sh. Arun Nilender Prakash Vs. Union of India & Ors. 27 Kumar Srivastava during crossexamination admitted the fact that this is the second transfer in the history of the property and he voluntarily said that this property was initially purchased by Punj Sons Pvt. Ltd. and thereafter it came to the share of the plaintiff under the said award.
So, here it can be said that a change in ownership of leasehold rights in the property in question from M/s Punjsons Pvt. Ltd. to the plaintiff would thus amount to parting with the leasehold rights from the M/s Punjsons Pvt. Ltd. to the plaintiff and would constitute a transfer or assignment of leasehold rights within the meaning of Clauses (b) & (c) supra of the Lease Deed.
More so, the clauses aforesaid of the Lease Deed however entitle the lessor i.e. defendantsL & DO to unearned increase when the lessee transfers the leasehold rights. It suggests a voluntary act of transfer on the part of the lessee and not an involuntary transfer as happens in the case of succession on death. Section 6 of the Transfer of Property Act also, though not affecting any law relating to transfer of property to or by companies, associations or bodies of individuals, defines transfer of Nilender Prakash Vs. Union of India & Ors. 28 property as an act by which a person conveys property to another person or to himself. Thus, for a transfer to incur liability for unearned increase, it has to be by a voluntary act.
In the present matter, the transfer of the property in question from Punj Sons Pvt. Ltd. to the plaintiff is the voluntarily act of the M/s Punj Sons Private Ltd. and it is not the case of the plaintiff that there was any legal compulsion therefor. The vesting of leasehold rights in the property from the Punsons Pvt. Ltd. to the name of the plaintiff was a voluntary act to qualify as a transfer.
It is further view of the court is that the Clauses (b) & (c) supra of the Lease Deed do not require the transfer or assignment to be for consideration. The measure for unearned increase provided therein, of the difference between the premium paid and the market value of the land prevailing, also does not require exchange of any consideration for computation of unearned increase. There is no requirement of monetary consideration as a necessary concomitant of transfer, neither in Transfer of Property Act nor in any other law. If it were to be so, a gift, for Nilender Prakash Vs. Union of India & Ors. 29 consideration of natural love and affection, would also cease to be a transfer and would not attract any stamp duty or unearned increase.
In view of above discussion, view of the Court is the judgements relied by the ld. counsel for plaintiff are not applicable in the fact and circumstances of the present case and it is further view of the Court is that the defendant no. 1 and 2 are therefore, wholly justified in contention regarding liability of the plaintiff in payment of the unearned increase in respect of the property in view of the Clause (b) and (c) supra of the Lease Deed.
Hence, issue No. 1 and 2 are decided in favour of the defendants No. 1 and 2 and against the plaintiff. Issue No. 3: Whether the suit is barred by limitation? OPD Onus to prove this issue was conferred upon the defendants and the defendants in order to discharge their onus examined Sh. P.S. Oberoi as DW1. It is stated that plaintiff after getting the property mutated on 28.03.2005, for the first time after the lapse of two years represented against the demand of unearned Nilender Prakash Vs. Union of India & Ors. 30 increased through his counsel on 22.05.2007 which was duly replied by the advocate of the defendant. Hence the the present suit is barred by the limitation.
On the other hand, as per the plaintiff, the suit is very much within the limitation period. Admittedly the property in question converted from leasehold to freehold on 01.04.2005 and perusal of file shows that there is stamp of 13.03.2008 regarding the fact that as per Computer Record no such Caveat has been lodged in this case. So view of the Court is that the present suit is within limitation.
Hence, this issue is decided in favour of the plaintiff and against the defendant No. 1 and 2.
Issue No. 4 Whether the suit is not maintainable in view of alleged lack of course of action?OPD Onus to prove this issue was conferred upon the defendants and the defendants in order to discharge their onus examined Sh. P.S. Oberoi as DW1. As per the contention of the defendant No. 1 and 2, the plaintiff is liable to pay the unearned increase in respect of the property in view of clause C of the Lease Deed. On the other hand, as per the plea Nilender Prakash Vs. Union of India & Ors. 31 of the plaintiff, the plaintiff was not liable to pay the unearned increase as no consideration was exchanged inasmuch as under the family settlement, the suit property fell to the share of plaintiff. It is to note here that the Court has already observed that the contentions of the defendant No. 1 and 2 regarding liability liability of the plaintiff in payment of the unearned increase in respect of the property in view of the Clause (b) and (c) supra of the Lease Deed is wholly justifiable and issue No. 1 and 2 have already decided in favour of the defendant No. 1 & 2 and against the plaintiff. Hence, Issue No. 4 is also decided in favour of the defendant No. 1 and 2 and against the plaintiff.
Relief : The suit the plaintiff is dismissed. Let, decree sheet be drawn accordingly and file be consigned to record after due compliance. PRONOUNCED IN THE OPEN COURT ON THIS th DAY OF 28TH FEBRUARY, 2017.
(REKHA) ADDITIONAL DISTRICT JUDGE05 PATIALA HOUSE COURTS, NEW DELHI DISTRICT, NEW DELHI JUDGE CODE :DL0055 Nilender Prakash Vs. Union of India & Ors. 32 Nilender Prakash Vs. Union of India & Ors. 33 Relief : The suit the plaintiff is dismissed. Let, decree sheet be drawn accordingly and file be consigned to record after due compliance.
PRONOUNCED IN THE OPEN COURT ON THIS th DAY OF 28TH FEBRUARY, 2017.
(REKHA) ADDITIONAL DISTRICT JUDGE05 PATIALA HOUSE COURTS, NEW DELHI DISTRICT, NEW DELHI JUDGE CODE :DL0055 Nilender Prakash Vs. Union of India & Ors. 34 CS No. 56871/16 Nilender Prakash Vs. Union of India & Ors.
28.02.2017 Present : None for parties.
File perused.
Vide my separate judgment announced in the open court, the suit of the plaintiff is dismissed and disposed off. Let, decree sheet be drawn accordingly. File be consigned to record room after due compliance.
(REKHA) ADDITIONAL DISTRICT JUDGE05 PATIALA HOUSE COURTS, NEW DELHI DISTRICT, NEW DELHI JUDGE CODE :DL0055 28.02.2017 Nilender Prakash Vs. Union of India & Ors. 35