DELHI DEVELOPMENT AUTHORITYversusGAURAV KUKREJA

                    [2015] 4 S.C.R. 421


           DELHI DEVELOPMENT AUTHORITY                       A

                             v.
                   GAURAV KUKREJA

             (Civil Appeal No. 3124 of 2015)                 B

                    MARCH 24, 2015

    [V. GOPALA GOWDA AND R. BANUMATHI, JJ.]
     Urban Development: Conversion of property from c
leasehold to freehold - Permissibility - Owner-vendor
agreed to sell his suit property and executed a General .
Power of Attorney in favour of husband of the vendee -
 Thereafter, vendor refused to execute the sale deed which
led to filing of suit for specific performance by the son and D
husband of the vendee - Compromise decree passed -
Based on compromise decree , respondent-son applied to
ODA for conversion of suit property from leasehold to
freehold - DOA refused conversion on the ground that
respondent did not possess good title - Writ petition - High E
Court allowed the writ petition on the ground that
respondent is son of an agreement holder and as well as
of holder of general Power of Attorney and, therefore, he
was not a stranger to the transaction and that the condition
of clause 13 of the Conversion Scheme stood satisfied in F
the facts of the case - Held: Respondent was neither a
holder of a power of attorney nor had any subsisting n·ght
in the suit property - High Court issued direction for
conversion mainly on the ground that the respondent has G
got decree for specific performance of sale - High Court
failed to appreciate that the decree was based on alleged
compromise arrived at between the family members - High

                            421                              H



                            ' .
422         SUPREME COURT REPORTS                [2015] 4 S.C.R.


A Court erred in holding that respondent was entitled to apply
  for conversion of the property.
           Allowing the appeal, the Court
           HELD: 1. In the suit for specific performance filed
 B    by respondent and his father, DOA was not made a
      party to the suit despite the fact that it was within their
      knowledge that the property is a leasehold property
      under the control of DOA and cannot be disposed of
      without obtaining a prior permission from the DOA. In
 C    terms of Section 15(a) of the Specific Relief Act 1963,
      the suit for specific performance can be filed by "any
      party" to the contract. In the instant case, suit for
      specific performance was file~ by the respondent and
      his father who admittedly were not the parties to the
 D    agreement to sell. Vendor, during the pendency of suit,
      remained ex parte and the suit was decreed in terms
      of a compromise arrived be,tween the parties, all of
      whom were family members. The suit for specific
      performance was a collusive suit, where the
 E    respondent and his father used the process of the
      court to get rid of the stamp duty, registration charges
      and unearned increase payable to DOA. [Para 10] [428-
      A-E]
 F         2. As per the decree for specific performance, sale
      deed to be executed by the defendant namely holder
      of leasehold right and holder of agreement to sell
      within the period of 30 days from the date of the
      decree and further directed to pay requisite stamp duty
G     and registration charges. Instead of complying with
      the order of the High Court and getting the sale deed
      executed, after making payment of registration charges
      and stamp duty, the respondent applied for conversion
      of the property through father of the respondent and
H     power of attorney holder and the same was rejected.



                                 \   f
    DELHI DEVELOPMENT AUTHORITY v. GAURAV               423
                  KUKREJA

The conversion cannot be sought for by a person who A
Is not the owner of the property but is only residing
in the premises. [Paras 11, 12] (428-F-G; 429-0,E]
3. A scheme of conversion from leasehold system of
land tenure into freehold was brought into force by the
                                                           6
Government. In terms of Clause 13 of the Scheme, it
is thus mandatory for a person to file a conversion
application to have a power of attorney from the
lessee/sub-lessee/allottee. Further in case of
successive power of attorney, Clause 13 requires for       c
the proof of possession alongwith the linkages of
original lessee/sub-lessee/allottee with the last power
of attorney is established and attested copies of
power of attorney be submitted. In the light of
Conversion Scheme, DOA rejected the conversion             D
application on the ground that the respondent is not
a power of attorney holder in respect of the suit
property. The property cannot be converted from
leasehold to freehold directly in the name of the
respondent as he is neither a general power of             E
attorney holder nor a holder of agreement to sell. The
High Court appears to have issued direction for
conversion mainly on the ground that the respondent
has got decree for specific performance for sale. (Paras
13, 15] [430-A, B, H; 431-A-D]                             F

     Suraj Lamp & Industries (P) Ltd. vs. State of Haryana
& Anr. (2009) 7 SCC 363; Suraj Lamp & Industries (P) Ltd.
(2) vs. State of Haryana & Anr. (2012) 1 SCC 656:2011
(11) SCR 848; Director of Settlements, Andhra Pradesh G
and Ors. vs. M. R. Apparao and Anr. (2002) 4 SCC
638:2002 (2) SCR 661 - relied on.
               Case Law Reference
(2009) 7 SCC 363      Relied on.              Para 14      H
424        SUPREME COURT REPORTS                  [2015] 4 S.C.R:


A     2011 (11) SCR 848          Relied on.            Para 15

      2002 (2) SCR 661           Relied on.            Para 18

         CIVIL APPELLATE JURISDICTION: Civil Appeal No.
 B    3124 of2015.

          From the Judgment and Order dated 15.07.2010 in LPA
      NO. 466 of 201 Oof the High Court of Delhi at New Delhi.

          Dhruv Tamta Bi nu Tamta for the Appellant.
c
          Navin Chawla for the Respondent.

          The Judgment of the Court was delivered by

          R. BANUMATHI, J. 1. Leave granted.
D
      2. This appeal arises out of the order dated 15.07.2010
  passed by a Division Bench of the High Court of Delhi,
  dismissing the Letters Patent Appeal No.466 of 2010,
  holding that respondent is entitled to be taken as a Power
E
  of Attorney holder and is thereby entitled to get the suit
  property converted from leasehold to freehold.

      3. Brief facts of the case which led to the filing of this
F appeal are as follows:- The property which is sought to be
  converted is comprised in Plot No.N-73, Panchsheel
  Cooperative House Building Society Ltd, New Delhi. ODA
  executed perpetual sub-lease deed dated 16.08.1967 in
  respect of the suit property in favdur of one Sh. Jan Talwar
G (Defendant No.1 in the original suit). Jan Talwar by an
  agreement to sell dated 10.6.1986, agreed to sell the suit
  property to Mrs. Raymen Kukreja for a sale consideration
  of Rs.20,50,000/-. Jan Talwar, in respect of the same suit
H property, also executed a General Power of Attorney dated
    DELHI DEVELOPMENT AUTHORITY v. GAURAV                       425
           KUKREJA [R. BANUMATHI, J.]

 10.06.1986 in favour of Lekh Raj Kukreja-husband of vendee      A
i.e. Mrs. Raymen Kukreja. The cause of action arose in the
year 1989, when Jan Talwar refused to execute the sale
deed, even after receiving the complete sale consideration.
This led to the filing of civil suit being CS (OS) No.2777/      B
1989 for a decree of specific performance of the aforesaid
agreement to sell. Though the agreement to sell was made
in favour of Raymen Kukreja, the suit for specific
performance was filed by the respondent-Gaurav Kukreja
and Lekh Raj Kukreja (father of Gaurav Kukreja) against Jan      C
Talwar and Raymen Kukreja (mother of Gaurav Kukreja). The
civil suit was filed on the premise that both, the GPA holder
(father of Gaurav Kukreja) and vendee (mother of Gaurav
Kukreja) had surrendered their rights in favour of Gaurav        D
Kukreja and that they had no objection if the property is
transferred in the name of respondent. Jan Talwar having
remained ex parte, the suit was decreed by Single Judge
in terms of a compromise arrived at between the parties          E
therein. Learned Single Judge of the High Court while
deciding the CS (OS) No.2777/1989 held the entire
transaction to be valid and observed that respondent and his
father and mother were ready and willing to complete the
sale transaction dated 10.06.1986 but Jan Talwar failed to       F
perform his part of obligation. In the civil suit, Jan Talwar
though entered appearance subsequently remained exparte.
Based on the compromise decree in the original suit, Gaurav
Kukreja applied to DOA for the conversion of suit property       G
from leasehold to freehold. However, the DOA refused the
conversion on the ground that as per the scheme, Gaurav
Kukreja did not possess a good title.

                                                                 H
426         SUPREME: COURT REPORTS                 [2015] 4 S.C.R.


A         4. Aggrieved, respondent-Gaurav Kukreja filed W.P.(<.;)
      No.7608/2009 before the High Court of Delhi, seeking the
      conversion of suit property from leasehold to freehold, on the
      strength of a policy decision taken by DDA and based on
 8    the compromise decree in the civil suit. Respondent
      contended that DDA wrongfully denied him the benefit of
      Conversion Scheme even when respondent has complied
      with the conditions therein. Respondent is stated to have
      deposited an amount of Rs.18,55,347/- with DDA towards
c     conversion charges.

       5. Learned Single Judge of High Court of Delhi, after
  considering material on record allowed the writ petition by
D holding that the decree passed in the civil suit stands on a
  higher footing than any General Power of Attorney as per
  Clause 13(a) of the Conversion Policy. The possession of
  suit property by the respondent has been substantiated by
  the correspondence between the respondent and DDA which
E have been exchanged at the same address as that of suit
  property in respect of which conversion has been sought.
  Learned Single Judge observed that respondent is a son of
  an agreement holder and as well as holder of general Power
F of Attorney and therefore the respondent is not a stranger
  to the transaction and that the condition of Clause 13 of the
  Conversion Scheme stands satisfied in the facts of the
  case.

G     6. Against the decision of the learned Single Judge of
  High Court of Delhi, Letters Patent Appeal filed by the DDA
  also came to be dismissed. The Division Bench, while
  dismissing the Letters Patent Appeal, held that the
H respondent could certainly be taken to be a power of
     DELHI DEVELOPMENT AUTHORITY v. GAURAV                         427
            KUKREJA [R. BANUMATHI, J.]

attorney holder and thus fully entitled to apply for conversion.    A
Being aggrieved by the dismissal of Letters Patent Appeal,
respondent-DOA has preferred this appeal.

     7. Contention of DOA is that the suit property is a
leasehold property and any attempt to dispose of the same B
should have been proceeded only after an approval from
DOA. It was submitted that the suit for specific performance
filed by the respondent and his father-Lekh Raj Kukreja
against Jan Talwar and Raymen Kukreja, was a collusive suit         c
and was an attempt to escape the payment of stamp duty
and registration charges, which would otherwise be payable
on the part of the respondent on account of registration of
a sale deed. Further contention of DOA is that the
                                                             D
respondent does not satisfy the terms of Clause 13 of the
Conversion Scheme as he is neither a power of attorney
holder nor a holder of sale deed in respect of the suit
property.
                                                                    E
     8. Per contra, learned counsel for respondent has
submitted that even after obtaining a decree of specific
performance and having paid the conversion charges
alongwith surcharge of 331/3%, the conversion of the suit
property is being wrongly denied to him. It is submitted that F
long back on 29.4.2004, an amount of Rs.18,55,347/- has
already been deposited with DOA alongwith an application
for conversion. It is contended that the respondent is having
physical possession of the suit property and therefore all the G
pre-requisites of Clause 13 of Conversion Scheme stands
sa~isfied and thus he is entitled to conversion of suit property
from leasehold to freehold.

    9. We have carefully considered the rival submissions           H
428        SUPREME COURT REPORTS                [2015] 4 S.C.R.


A     and perused the impugned order and material on record.

       10. In the suit for specific performance filed by
  respondent-Gaurav Kukreja and his father-Lekh Raj Kukreja,
  DDA was not made a party to the suit despite the fact that
8 it was within their knowledge that the property is a leasehold
  property under the control of DDA and cannot be disposed
  of without obtaining a prior permission from the DDA. In
  terms of Section 15(a) of the Specific Performance Act
c 1963, the suit for specific performance can be filed by "any
  party" to the contract. In the instant case, suit for specific
  performance was filed by the respondent and his father who
  admittedly were not the parties to the agreement to sell. Jan
D Talwar (vendor), during the pendency of suit, remained
  exparte and the suit was decreed in terms of a compromise
  arrived between the parties, all of whom were family
  members. In our considered view, suit for specific
  performance is a collusive suit, where the respondent and
E his father used the process of the court to get rid of the
  stamp duty, registration charges and unearned increase
  payable to DDA.

       11. Be that as it may, as per the decree for specific
F performance, sale deed to be executed by the defendant
  namely Jan Talwar (holder of leasehold right) and Mrs.
  Raymen Kukreja (holder of agreement to sell) within the
  period of 30 days from the date of the decree and further
G directed to pay requisite stamp duty and registration
  charges. The relevant direction in the decree is extracted
  below:

          "There will be a decree for specific performance of the
H         agreement dated 10th June, 1986 in favour of Plaintiff
    DELHI DEVELOPMENT AUTHORITY v. GAURAV                   429
           KUKREJA [R. BANUMATHI, J.]

     No.2 and against Defendant No.1 in respect of A
     property No.N-73, Panchsheel Park, New Delhi.
     Defendant No.1 shall arrange to have sale deed
     executed within a period of 30 days from today. In
     case he fails to do so the Registrar of this Court shall 8
     nominate or appoint some official of this Court to
     execute the sale deed for and on behalf of Defendant
     No.1 and in favour of Plaintjff No.2 on payment of
     requisite stamp duty and registration charges. The
     official nominated by the Registrar will be paid a fee C
     of Rs.10,000/-."
     (Annx.-P 3)

     12. Instead of complying with the above order of the o
High Court and getting the sale deed executed, after making
payment of registration charges and stamp duty, the
respondent applied for conversion of the property through
Lekh Raj Kukreja (father of the respondent and power of
                                                               E
attorney holder) and the same was rejected. The conversion
cannot be sought for by a person who is not the owner of
the property but is only residing in the premises. Onbehalf
of the appellant, it was submitted that the DOA had even
granted N.O.C. way back in the year 2006 (Annx. P8) without F
receiving un-earned increase charges as per the terms of
the lease-deed which is always charged by DOA when the
property exchanges hands. According to DOA, it was granted
only because a local commissioner was appointed by the G
High Court. It is further stated that the respondent
deliberately did not get the sale deed executed till today and
the respondent is trying to evade the stamp duty and
registration charges thereby causing a loss to the state
                                                               H
430        SUPREME COURT REPORTS                 [2015] 4 S.C.R.


A     exchequer.

        13. A scheme of conversion from leasehold system of
   land tenure into freehold was brought into force and noticed
   by the Government. The relevant clause of the Scheme of
 B Conversion i.e. Clause 13 reads as under:-

          "13. The conversion shall also be allowed in the cases
          where lessee/sub-lessee/allottee has parted with the
          possession of the property provided that:
c
           a) Application for conversion is made by a persorr
           holding power of attorney from lessee/sub-lessee/
           allottee to alienate (sell/transfer) the property.
D         b) Proof is given of the possession of the property in
          favour of the person in whose name conversion is being
          sought.

          c) Where there are successive power of attorneys,
E
          conversion will be allowed after verifying the factum of
          possession provided that the linkage of original lessee/
          sub-lessee/allottee with the last power of attorney is
          established and attested copies of power of attorneys
F         are submitted.

          In such cases, a surcharge of 331/3% on the
          conversion fee would be payable over and above the
          normal conversion charges (no unearned increase will
G         be recoverable)."

      In terms of Clause 13 of the Scheme, it is thus
  mandatory for a person to file a conversion application to
H have a power of attorney from the lessee/sub-lessee/allottee.
    DELHI DEVELOPMENT AUTHORITY v. GAURAV                    431
           KUKREJA [R. BANUMATHI, J.]

Further in case of successive power of attorney, Clause 13      A
requires for the proof of possession alongwith the linkages
of original lessee/sub-lessee/allottee with the last power of
attorney is established and attested copies of power of
attorney be submitted. In the light of Clause 13 of the         8
Conversion Scheme, ODA rejected the conversion
application on the ground that the respondent is not a
power of attorney holder in respect of the suit property. The
property cannot be converted from leasehold to freehold
directly in the name of the respondent as he is neither a       C
general power of attorney holder nor a holder of agreement
to sell. The High Court appears to have issued direction for
conversion mainly on the ground that the respondent has got
decree for specific performance for sale. The High Court        D
failed to appreciate that the decree for specific performance
was based on the alleged compromise arrived at between
the family members.

    14.      In Suraj Lamp & lndusfries (P) Ltd. vs. State of E
Haryana & Anr., (2009) 7 SCC 363, this Court referred to
the ill-effects of what is known as General Power of Attorney
Sales (for short 'GPA Sales') or Sale AgreemenUGeneral
Power of Attorney/Will transfers (for short 'SA/GPA/WILL' F
transfers), and it was held as under:

     "19. Recourse to "SA/GPA/WILL" transactions is taken
     in regard to freehold properties, even when there is no
     bar or prohibition regarding transfer or conveyance of G
     such property by the following categories o{ persons:

     (a) Vendors with imperfect title who cannot or do not
     want to execute registered deeds of conveyance.
                                                                H
432    SUPREME COURT REPORTS                   [2015] 4 S.C.R.


A     (b) Purchasers who want to invest undisclosed wealth/
      income in immovable properties without any public
      record of the transactions. The process enables them
      to hold any number of properties without disclosing
B     them a~ assets held.
      (c) Purchasers who want to avoid the payment of stamp
      duty and registration charges either deliberately or on
      wrong advice. Persons who deal in real estate resort
      to these methods to avoid multiple stamp duties/
c
      registration fees so as to increase their profit margin.
      20. Whatever be the intention, the consequences of
      SA/GPA/WILL transactions are disturbing and far-
      reaching, adversely affecting the economy, civil society
D
      and law and order. Firstly, it enables large-scale
      evasion of income tax, wealth tax, stamp duty and
      registration fees thereby denying the benefit of such
      revenue to the Government and the public. Secondly,
E     such transactions enable persons with undisclosed
      wealth/income to invest their black money and also
      earn profit/income, thereby encouraging circulation of
      black money and corruption.
F     21. These kinds of transactions have disastrous
      collateral effects also. For example, when the market
      value increases, many vendors (who effected power of
      attorney sales without registration) are tempted to resell
G     the property taking advantage of the fact that there is
      no registered instrument or record in any public office
      thereby cheating the purchaser. When the purchaser
      under such "power of attorney sales" comes to know
      about the vendor's action, he invariably tries to take the
H
    DELHI DEVELOPMENT AUTHORITY v. GAURAV                     433
           KUKREJA [R. BANUMATHI, J.]

     help of musclemen to "sort out" the issue and protect A
     his rights. On the other hand, real estate mafia many
     a time purchase properties which are already subject
     to power of attorney sale and then threaten the
     previous "power of attorney sale" [pic]purchasers from
                                                                8
     asserting their rights. Either way, such power of attorney
     sales indirectly lead to growth of real estate mafia and
     criminalisation of real estate transactions."

    15. Further a three Judge Bench of this Court in Suraj     c
Lamp & Industries Pvt. Ltd.(2) vs. State of Haryana & Anr.,
(2012) 1 sec 656, considered the validity of such SA/GPA/
WILL transaction and observed thus:

     "23. Therefore, an SA/GPA/WILL transaction does not D
     convey any title nor creates any interest in an
     immovable property. The observations by the Delhi
     High Court in Asha M. Jain v. Canara Bank, (2001) 94
     DLT 841, that the "concept of power-of-attorney sales E
     has been recognised as a mode of transaction" when
     dealing with transactions by way of SA/GPA/WILL are
     unwarranted and not justified, unintendedly misleading
     the general public into thinking that SA/GPA/WILL
     transactions are some kind of a recognized or F
     accepted mode of transfer and that it can be a valid
     substitute for a sale deed. Such decisions to the extent
     they recognise or accept SA/GPA/WILL transactions
     as concluded transfers, as contrasted from an G
     agreement to transfer, are not good law.

     24. We therefore reiterate that immovable property can
     be legally and lawfully transferred/conveyed only by a
     registered deed of conveyance. Transactions of the        H
434      SUPREME COURT REPORTS                [2015] 4 S.C.R.


A       nature of "GPA sales" or "SNGPA/WILL transfers" do
        not convey title and do not amount to transfer, nor can
        they be recognised or valid mode of transfer of
        immovable property. The courts will not treat such
 B      transactions as completed or concluded transfers or as
        conveyances as they neither convey title nor create any
        interest in an immovable property. They cannot be
        recognised as deeds of title, except to the limited
        extent of Section 53-A of the TP Act. Such
c       transactions cannot be relied upon or made the basis
        for mutations in municipal or revenue records. What is
        stated above will apply not only to deeds of
        conveyance in regard to freehold property but also to
D       transfer of leasehold property. A lease can be validly
        transferred only under a registered assignment of
        lease. It is time that an end is put to the pernicious
        practice of SNGPA/WILL transactions known as GPA
        sales."
 E
       16. According to respondent, on 29.4.2004 his father
  Lekh Raj Kukreja, who was the then Power of Attorney holder
  has submitted an application for conversion of the said
F property from leasehold to freehold and deposited the
  conversion charges of Rs.18,55,347/- and also deposited
  further sum of Rs.27,222/- towards enhanced ground rent as
  demanded by the ODA. It was submitted that alongwith the
  application all necessary documents i.e. an Agreement to
G Sell, General Power of Attorney and copy of the judgment
  in CS (OS) ~: 2777/1989 dated 30.03.2001 were
  submitted to the DOA. Even though the said application was
  filed way back in 2004, it is not known as to why the
H respondent and his father Lekh Raj Kukreja did not follow
    DELHI DEVELOPMENT AUTHORITY v. GAURAV                            435
           KUKREJA [R. BANUMATHI, J.]

up the matter within a reasonable time and they have A
approached the High Court only in the year 2009.

     17. Main contention of the respondent is that he is a
decree holder for specific performance and even going by
the ratio of Suraj Lamp & Industries (P) Ltd.'s case, the B
respondent is at a higher footing than a holder of Power of
Attorney and therefore the respondent is entitled to have
conversion of the land. As pointed out earlier, the suit for
specific performance, in our view, is a collusive one and c
therefore cannot confer any right upon the respondent to
claim conversion.

     18. In Director of Settlements, Andhra Pradesh and
Ors. vs. M.R. Apparao and Anr., (2002) 4 SCC 638, while D
considering the scope of the power of High Court to issue
a writ of mandamus under Article 226 of the Constitution, this
Court has held as under:

     "17 ..... It is, therefore essentially, a power upon the High    E
     Court for issuance of high prerogative writs for
     enforcement of fundamental rights as well as non-
     [pic]fundamental or ordinary legal rights, which may
     come within the expression "for any other purpose".              F
     The powers of the High Courts under Article 226
     though are discretionary and no limits can be placed
     upon their discretion, they must be exercised along the
     recognized lines and subject to certain self-imposed             G
     limitations. The expression "for any other purpose" in
     Article 226, makes the jurisdiction of the High Courts
     more extensive but yet the Courts must exercise the
     same with certain restraints and within some
     parameters. One of the conditions for exercising power           H
436         SUPREME COURT REPORTS                  [2015] 4 S.C.R.


 A          under Article 226 for issuance of a mandamus is that
            the Court must come to the conclusion that the
            aggrieved person has a legal right, which entitles him
            to any of the rights and that such right has been
 8          infringed ... "

          On the date of filing of the writ petition, the respondent
      was neither a holder of a power of attorney nor had any
      subsisting right in the suit property and while so, the High
 c    Court was not right in holding that the respondent is entitled
      to apply for conversion of the property. Dehors the scheme
      of conversion, the respondent is not entitled to apply for
      conversion of the property. In our considered view, the
      respondent does not fall within the ambit of Clause 13 of the
 0
      Conversion Scheme and therefore the impugned order of the
      High Court cannot be sustained and is liable to be set aside
      and the appeal deserves to be allowed.

 E      19. In the result, the impugned order Ji> set aside and
   the appeal is allowed. The respondent is at liberty to pursue
   the matter with DOA in accordance with law. Respondent is
   also at liberty to seek for return of money deposijed by him/
   his father-Lekhraj Kukreja and when such application is
 F made for return of money, the appellant/DOA is directed to
   return the same with 10% interest. No order as to costs.
      Devika Gujral                                  Appeal allowed.