Holding

The Court held that DDA must grant the conditional approval but DCM must remove the valid objections, limiting the scheme to the 52 acres it owns and complying with the 1983 Master Plan, while DDA retains ownership and lease‑hold rights over the remaining 11 acres.

Summary

The Supreme Court had directed the Delhi Development Authority (DDA) to grant conditional approval to Delhi Cloth Mills Ltd.'s (DCM) redevelopment scheme for 63 acres, subject to removal of objections. DDA raised three objections: conformity with the 2001 Master Plan, the incorrect assumption that DCM owned the entire 63 acres (only 52 acres are owned by DCM, the remaining 11 acres belong to DDA), and that its 1983 resolution did not relinquish its rights over the lease‑hold lands. The Court held that DDA must honour the Supreme Court direction and grant the conditional approval, but DCM is obliged to address the valid objections, namely to conform to the 1983 Master Plan and to limit the scheme to the 52 acres it actually owns, while DDA retains ownership of the 11 acres. The Court clarified that the 1983 resolution does not extinguish DDA's lease‑hold rights and that any change of land use requires DDA's written consent under the lease terms. Consequently, DCM may proceed with a modified scheme on its 52 acres and may negotiate with DDA for the remaining land, but cannot rely on the earlier resolution to override DDA's rights. The applications for further directions were disposed of without costs.

Issues considered

The extent to which DDA is bound to grant conditional approval as directed by the Supreme Court.
Whether DDA's objection that the scheme must conform to the 2001 Master Plan is valid.
Whether DDA's claim of ownership over 11 acres of the land is legally tenable.
Whether the 1983 DDA resolution extinguished DDA's lease‑hold rights over the disputed land.
What modifications, if any, DCM must make to its redevelopment scheme to comply with the Court's directions.

Subjects

redevelopment schememaster plan complianceleasehold rightsconditional approvalland ownership disputeDelhi Development AuthorityDelhi Cloth Mills Ltd.municipal corporation objections

Judgment

DELHI DEVELOPMENT AUTHORITY
A
v.
DELHI CLOTH MILLS LTD. AND ORS.

MAY l, 1991

B [RANGANATH MISRA, CJ, M.M. PUNCHHI AND
S.C. AGRAWAL, JJ.]

Delhi Cloth Mills-Scheme for redevelopment of the mills area-
Supreme Court's direction to the Delhi Development Authority to grant
conditional approval to the scheme subject to removal of objections
C raised by the Municipal Corporation of Delhi and the Delhi Develop-
ment Authority-Objections by DDA-Validity of-Directions given
by Supreme Court.

By an order dated 13.3.1990 the Supreme Court directed the
Delhi Development Authority (D.D.A.) to grant conditional approval to
D the respondent-Company's (D.C.M.) scheme pertaining to the develop-
ment of mills land measuring 63 acres for construction of flatted
factories and residential complex subject to removal of objections raised
by Municipal Corporation of Delhi and Delhi Development Authority.
The matter could not be t"malised by the parties since the DDA took
certain objections to the scheme: (a) that the Delhi Cloth Mills should
E file a modified plan so as to conform to the Master Plan of the year
2001; (h) the legal proceedings before the High Court and the Supreme
Court proceeded on the wrong assumption that the entire 63 acres of
land was owned by the Delhi Cloth Mills whereas the DCM owns only
52 acres of land while the balance II acres was owned by the DDA
which is partly on lease and partly in trespass with the Delhi Cloth
F Mills; and (c) the grant of permission by the DDA vide its resolution No.
26 dated 1-2.83 does not ipso facto mean that it had given up its rights
or title to the lease hold lands or that it had regularised the possession of
the trespassed upon land with the Delhi Cloth Mills. The respondent-
Company filed applications for direction in this court.

G Disposing the applications, this Court,

HELD: 1- The D-D.A- stands directed by this Court to grant to
the D.C-M- approval, even though conditional, and the D.C.M. stands
impliedly directed and is duty bound to remove the objections raised by
the D-D-A. This Court had endorsed by means of this .directive the
H already known views of the Delhi High Court towards restoring resolu-

590
D.D.A. v. D.C.M. 591

tion of the D.D.A. dated February 1, 1983, whereby the scheme as given
A
by the Delhi Cloth Mills was approved in tenns thereof. The approval
._._ came from the D.D.A. at a time when the Master Plan of the year 1962
was operative and the one of the year 2001 was notexistant, and if at all
existant in an embryonic stage. The law governing the subject and the
rules and regulations then in vogue and applicable were deemingly kept
in view and applied by the D.D.A. in the approval of the scheme. To B
whittle down the effect of that resolution on the emergence of the new
Master Plan of the year 2001, made applicable after the orders of this
Court would, at the present stage, if insisted npon be spelled out-as a
step to undermine the orders of this Court. Such an objection by the
D.D.A. when raised before March 13, 1990, the day when the Supreme
Court passed its judgment, was untenable in law and the D.D.A. should
have known it before putting such an objection to use. Therefore, the
c
first objection of the D.D.A. is repelled and it is directed to stick to the
position as per Master Plan as existing on February l. 1983. [594D-G]

2. The objection of the D.D.A. with regard to the wrong impres-
sion of the ownership of the land is valid substantially. It is the admitted D
..... case of tbe parties that the scheme pertains to 63 acres of land which the
Delhi Cloth Mills while applying for sanction claimed to own and one of
the considerations in passing the resolution dated February 1, 1983 ex
facie was the D.D.A. being impressed by a private enterpreneur coming
forward with a scheme with such a large chunk of land. The D.D.A.
when engaged in examining and sanctioning the proposal was justified E
on proceeding on the supposition of facts given by the Delhi Cloth Mills
as true, and in processing the sanie cannot be said to have surrendered
its ownership rights qua land measuring 11 acres. It cannot be assumed
that by upholding the resolution dated February 1, 1983, the Delhi High
Court, or Supreme Court, had acknowledged Delhi Cloth Mills as the
owner of 63 acres of land involved iu the scheme or that the right of F
ownership of the D.D.A. over about 11 acres ofland stood extinguished
by such exercise. Therefore, the said resolution cannot trample the
rights of D.D.A. as owner over 11 acres of land when the respective
leases reserve to the D.D.A. the right of resumption, and in leases
expiring by effiux of time the option not to renew. The scheme approved
must thus of necessity be denoted to that effect as the objection of the G
D.D.A. in that regard and to that extent is valid and tenable. But the
Delhi Cloth Mills can still steer through its project in its owned 52
acres, even though in a truncated form and submit an amended plan.
The scheme in the modified form would have to be brought in, not a
new but as a substitute for the original scheme and that scheme would
register its birth, legitimacy and binding force as of the original H
592 SUPREME COURT REPORTS [ 1991) 2 S.C.R.

A
scheme. [594H, 595A-D, E-F, 5971<', 598D)

3. Respondent-Company's relationship with the D.D.A. is that of
a lessee and lessor. Out of 10 leases one is perpetual in nature and the
remaining leases are short durated. u.1der the terms of the perpetual
lease unless the D.D.A. grants approval to the change of user as asked
B and reconstruction, the Delhi Cloth Mills has no such deemed right or
privilege ignoring the covenants and the terms of the lease. Therefore, it
cannot be said that the resolution has the automatic effect of the D.D.A.
having granted change of user, consciously or' im)11iedly,' or vesting any
right in that regard to the Delhi Cloth Mills. [597D-F, 596EJ

CIVIL APPELLATE JURISDICTION: I.A. Nos. 4. 5, 6 and 7
c in Civil Appeal Nos. 1401 & 1402 of 1990.

From the Judgment and Order dated 22.5. 1987 of the Delhi High
Court in C.W.P. No. 2687 of 1986.

D Kapil Sibal, V.B. Saharya and R.K. Khanna for the Appellant.

Rajiv Sawhney, Sanjeev Anand, Deepak Kumar Thakur, Mrs.
Ameeta Rathore, Kapil Chandra for J.B. Dadachanji & Co. and R.K.
Maheshwari for the Respondents.

·E The following Order of the Court was delivered:

PUNCHHI, J. These are applications for directions in Civil
Appeal Nos. 1401and1402 of 1990 decided by us on March 13, 1990.

For facility of fact situation resort be had to our judgment dated
F March 13, 1990. Direction given by to the D.D.A. was meaningful and
clear that it shall grant to the Delhi Cloth Mills conditional approval
subject to the removal of the objections enumerated and extracted in
the judgment, as raised, or such of them as were valid and tenable in
law, after the Delhi Cloth Mills is heard by the Municipal Corporation
of Delhi, the author of the objections, and which the D.D.A. had
G adopted, and the matter to be formalised forthwith by the D.D.A. and
the authorities connected therewith within a time frame. This has
reportedly met with hurdles necessitating these applications. The
objections may broadly be divided in three parts:

(i) objections which are within the exclusive domain of the
H Municipal Corporation of Delhi;
D.D.A. v. D.C.M. [PUNCHHI, J.l 593

(ii) objections which are exclusively within the domain of
A
the D.D.A.; and

(iii) objections which are lendingly common to both, the
D.D.A. and the Municipal Corporation of Delhi oversee-
ing and safeguarding the interests of each other.
B
And these objections can also be divided as surmountable and
insurmountable.

The objections, to begin with, as raised by the Municipal Corpo-
ration of Delhi and later adopted by the D.D.A., presently requiring
smoothening before us relate to those which are within the exclusive C
domain of the D.D.A. for it is asserted by the applicant Delhi Cloth
Mills that the objections relating to the Municipal Corporation of
Delhi are not insurmountable and those can for the present, be left
alone to be tackled by the applicant without the intervention of the
Court. For this reason neither any direction is asked at this stage nor is
one necessary to the Municipal Corporation of Delhi. D

The D.D.A. has broadly three objections:

(i) To further the. resolution of the D.D.A., dated
February 1, 1983, the Delhi Cloth Mills should file an
amended or modified plan so as to conform to the Master E
Plan of the year 200 I;

(ii) Since the matter before the Delhi High Court, as also
in this Court, had proceeded on the assumption that the
entire 63 acres of land involved in the re-development for
flatted factories and residential complex was owned by the F
Delhi Cloth Mills, which assumption was wrong, the Delhi
Cloth Mills should confine its plan to about 52 acres of land
as owned by it as the balance about 11 acres of land is
owned by the D.D.A. which is either on varied termed
leases or in trespass with the Delhi Cloth Mills. The plan
would req uirc rectification accordingly; and G

(iii) The fact of grant of permission vide resolution of
1-2-1983 did not ipso facto mean that the D.D.A. had given
up its rights on lease hold lands in accordance with the
terms thereof or the title to it or to regularize possession of
the trespassed upon land with the Delhi Cloth Mills. H
594 SUPREME COURT REPORTS l 1991J 2 S.C.R.

A On that basis it is required of the Delhi Cloth Mills to confine its plans
within those 52 acres as owned by it and by a process of reasoning it is
hinted that after providing for recreational and other necessary
facilities. as required by law, there hardly would remain any land to
further the project.

B It has been maintained on behalf of the Delhi Cloth Mills that
the posture of the D. D .A. is obstructive in nature and a step to flout or
undermine the orders of this Court. It has on the other hand been
maintained on behalf of the retrenched workers that since the settle-
ment arrived at by them with the Delhi Cloth Mills was beneficial to
them in nature, as a price for closure of the Mill, the posture of the f
D. D .A. was indirectly against their interests. They have prayed for
c suitable directions so that the benefits accruing to them by lapse of
time may not go dry.

At the outset, we put it beyond any doubt and re-affirm that the
D.D.A. stands directed by this Court to grant to the D.C.M. approval,
D even though conditional, and the D.C.M. stands impliedly directed
and is duty bound to remove the objections as were valid and tenable
in law as raised by the D.D.A. within its domain. Having gone thus far
there is no retreat of it contemplated. It is further to be understood
that this Court had endorsed by means of this directive the already
known views of the Delhi High Court towards restoring resolution of
E the D.D.A. dated February 1, 1983, whereby the scheme as given by
the Delhi Cloth Mills was approved in terms thereof. And obviously
the approval came from the D .D .A. at a time when the Master Plan of
the year 1962 was operative and the one of the year 2001 was not
existant, and if at all existant in an embryonic stage. The law governing
the object and the rules and regulations then in vogue and applicable
F were deemingly kept in view and applied by the D.D.A. in the ap-
proval oi the scheme. To whittle down the effect of that resolution on
the emergence of the new Master Plan of the year 2001, made applic-
able after the orders of this Court would, at the present stage, if
insisted upon be spelled out as a step to undermine the orders of this
Court. Such an objection by the D.D.A. when raised before March 13,
G 1990, the day when we passed judgment, was untenable in law and the
D.D.A. should have known it before putting such an objection to use.
For this reason, we repel the first objection of the D.D.A. and require
of it to stick to the position as per Master Plan as existing on February
1, 1983. This objection is thus surmounted.

H The second objection of the D.D.A. with regard to the wrong
D.D.A. v. D.C.M. [PUNCHHI, !.] 595

impression of the ownership of the land appears to us to be valid
A
substantially. It is the admitted case of the parties that the scheme
pertains to 63 acres of land which the Delhi Cloth Mills while applying
for sanction claimed to own and one of the considerations in passing
the resolution dated February 1, 1983 ex facie was the D.D.A. being
-. impressed by a private enterpreneur coming forward with a scheme
with such a large chunk of land. It is significant that nowhere at that B
stage, even remotely, or at any stage during the litigation before the
Delhi High Court or this Court, was the Delhi Cloth Mill's claim of
owning 63 acres of land been given a serious thought or refuted or put
to proof or testing. One way of looking at it now can be that the Delhi
Cloth Mills misled the D.D.A. in that regard and had the D.D.A.
known that the Delhi Cloth Mills owned only about 52 acres of land
the D.D.A. might have resolved differently. The other view as sug- c
gested by the Delhi Cloth Mills is that the D.D.A. of its own should
have counter checked the extent of the ownership of the land of the
Delhi Cloth Mills at the time of granting sanction. Learned counsel on
both sides have dwelt upon this matter a great deal. We cannot assume
that by upholding resolution dated February 1, 1983, the Delhi High D
Court, or for that matter this Court, had made or acknowledged Delhi
Cloth Mills as the owner of 63 acres of land involved in the scheme or
that the right of ownership of the D.D.A. over about 11 acres of land
stood extinguished by such exercise. Tlje D.D.A. when engaged in
examining and sanctioning the proposal was justified on proceeding on
the supposition of facts given by the Delhi Cloth Mills as true, and in E
processing the same cannot be said to have surrendered its ownership
rights qua land measuring 11 acres. Thus we are clear in arriving at the
view that the said resolution cannot trample the rights of D.D.A. as
owner over about 11 acres of land when the respective leases reserve to
the D.D.A. the right of resumption, and in leases expiring by efflux of
time the option not to renew. The scheme approved must thus of F
necessity be dented to that effect as the objection of the D.D.A. in
that regard and to that extent is valid and tenable.

Reservation in that regard appears also to have been made by the
Delhi High Court in its judgment in C.W.P. No. 1281of1985 decided
on July 22, 1988. While dealing with possibility of a law and order G
problem, the court relied on the Delhi Cloth Mill's management's
affidavit towards granting statutory compensation to the workers as
well as its undertaking to pay, in some event, additional compensa-
tion. The Delhi Cloth Mills had in the affidavit stated that the addi-
tional compensation shall be payable on expiry of two years from the
date the Delhi Cloth Mills is allowed by all the concerned authorities H
596 SUPREME COURT REPORTS [ 1991] 2 S.C.R.

A including the D.D.A. and the Municipal Corporation of Delhi to rede-
velop its entire 63 acres of land at Bara Hindu Rao and Kishan Gan j,
in accordance with the user stipulated therefore under the Master Plan
for Delhi dated September 1962. The High Court in judging the stand
taken by the Delhi Cloth Mills made the following significant
observations:
B
"No assurance is extended by any competent authority to
the workmen that the authorities shall not enforce the
Master Plan or shall not insist for due compliance of the
provisions of the Act and the regulations in the matter of
the Mill. It is also doubtful if any one could opt out of the
statutory provisions."
c
These observations make it clear that the D.D.A. cannot be said to
have abandoned its right either as a statutory body or that of the lessor
of land on leases held by the Delhi Cloth Mills by mere passing of the
resolution afore-mentioned, or correspondingly to have given any .:
D right to the workers.

We have been given the break up of those leases numbering 10.
One of them pertains to 36425 sq. yards (about 7 acres) which is
perpetual in nature and is not required to be renewed except that the
rent is revisable after every 25 years. The remaining leases are in
E comparison short durated, some of which have expired and others are
expiring in the year 2001. The unexpired period of leases is not long
enough in the context of the project. Besides there is an area which is
said to be trespassed upon by the Delhi Cloth Mills. This area under
durated leases and trespass totals about 4 acres. The Delhi Cloth Mills
cannot be permitted to lay hands on this area as of right to further the
F scheme. l~here a common term in each respective lease reserving right
to the lessor to determine the lease at any time if the land is required
for public purpose in consideration of the land having been demised
free of any premium. To involve this four acres of land in.ihc 5chcmc
the D.C.M. may have to work it out under a different shade and
premise and not from this Court. The ohjection is thus insurmount-
G able on this plain.

So far as the perpetual lease is concerned, its purpose covenants
for residential, cultural and recreational purposes of staff and workers
of the lessee and purposes ancilliary thereto, in accordance with the
rules and regulations in force in Delhi under the Municipality Act or
H any bye-laws framed by the lessor. It is further covenanted that for
D.D.A. v. D.C.M. [PUNCHHI, J.l 597

... purposes of construction of building the approval of the lessor in writ-
ing is a pre-condition before the start of the construction, and further
no alteration or addition in the building as approved by the lessor
either externally or internally can be made without first obtaining the
permission of the lessor in writing. Besides that if during the period of
A

lease, it is certified by the Central Government that the premises are
required for the purposes of the Central Government or any other B
public purpose, the lessor shall be entitled to take possession of the
land together with all building structures etc. with certain conse-
quences. It is thus plain and evident that even in the case of perpetual
lease enormous residual control is left with the lessor who alone cau
accord permission to construct building for the specified purposes for
residential, cultural and recreational purpose of the staff and workers
of the Mill and purposes ancilliary thereto, and on frustration of such c
purpose has the further right to treat the lease to have become void if
the land is used for any purpose other than for which the lease was
granted, not being the purpose subsequently approved by the lessor.
Thus unless the D.D.A. grants approval to the change of user as asked
and reconstruction, the Delhi Cloth Mills bs no such de.emed right or D
privilege ignoring the covenants and the terms of the lease. Thus it
cannot be suggested that the resolution afore-mentioned has the
automatic effect of the D.D.A. having granted change of user, con-
sciously or impliedly, or vesting any right in that regard to the Delhi
Cloth Mills. Here as well the D.C.M. would have to work out its plans
with the D .D .A. under the terms of the lease without any further E
mandate from this Court in this regard. This objection also is
insurmountable in the presence of the void clause.

Yet all is not lost for the Delhi Cloth Mills. It can still steer
through its project in its owned 52 acres, even though in a truncated
form and submit an ammended plan. On the other hand its relation- f
ship with the D .D .A. being that of a lessee and lessor permits a mean-
ingful dialogue seeking extensions of lease periods, and change of
permissive user in respect of 1J acres of land. It can make attractive
suggestions to the D.D.A. for setting up cultural, educational, recrea-
~ tional and other facilities etc. at the expense of the Delhi Cloth Mills,
if the project is to remain of the 63 acre size. It is the case of Delhi G
Cloth Mills that if it is allowed to involve the said 11 acres of land, the
project would he better and it is prepared to pay any charges as are
known to law to keep it as part of the project of the original size. Be
that as it may we are no experts to opine whether a 52 acre project
would be more viable or better or a 63 acre \me. But since the project
bas in terms of our orde~dated March 13, 1990 to go on, the D.D.A. H
598 SUPREME COURT REPORTS i 1991] 2 S.C.R.
A may if asked examine the suggestions. That is theh field and not ours
to decide.

Before concluding this Order, we cannot help remarking that
,. ....
both parties, i.e., the D.C.M. and the D.D.A. have to share mutually
the blame for the present situation. The D.C.M. for its cavalier way in
B
having asserted to own 63 acres of land and the D.D.A. in casually,
without consulting its records, passing its Resolution No. 26 dated
February 1, 1983 and communicating the same to the D.C.M. on
31-3-1983. Should the D.C.M. now confine its scheme and project to
its owned 52 acres of land, abandoning any effort to have included the
.,,. ~

remaining D.D.A. owned 11 acres of land by negotiations, and the
c D.D.A. in not offering on its own, or otherwise, the said land to the
D.C.M., the project as originally conceived would have to be spruced.
It is evident from the proceedings of the Resolution that as per Master
Plan, 23.14 acres have been earmarked for flatted factories and 43.39
acres as residential, though the sum total goes to more than 63 acres.
Both these areas include areas set apart for facilities and amenities •
D enumerated therein. The respective areas in that event would have to
be reduced keeping in view the ground realities of ownership and the
earmarking in the Master Plan. Cuts inevitably may have to be emp-
,.
Joyed in either area or both. Be that as it may, the scheme in the
modified form would have to be brought in. not a new but as a substi-
tutc for the original scheme and that scheme would register its birth.
E legitimacy and binding force as of the original scheme . The mandate in
this regard should be clearly understood by the parties concerned for
they are under obligation to responsibly carry out the directions of this
Court dated March 13, J990, in all events, and share the burden of it,
indeed as doing the blame.
•
F With these observations, these applications are disposed of. No
Costs.

T.N.A. Applications disposed of.