DELHI DEVELOPMENT AUTHORITYversusM/S. ANANT RAJ AGENCIES PVT. LTD.

                        [2016] l S.C.R. 787



            'DELHI DEVELOPMENT AUTHORITY                                 A
                                 v.
            M/S. ANANT RAJ AGENCIES PVT. LTD.
                   (Civil Appeal No. 3 783 of2016)
                          APRIL 12, 2016                                 B
       [V. GOPALA GOWDA AND ARUN MISHRA, JJ.]
       Delhi Development Act, 1957 - ss. 21 (1), 22 - Grant of lease
in favo11r of original lessee for twenty years - Extension allowed
for a further period of twenty years at option of lessee - Original      C
lessee approached DDA for renewal of lease - Breach of terms and
conditions of lease by lessee - Issuance of notice dated 16.02.1968
to lessee - Four years later termination of lease - Suit for perpetual
injunction by original lessee seeking restraining order against DDA
- Suit decreed infavour of original lessee - First appeal by DDA
dismissed - During pendency of second appeal by DDA, said                D
property purchased by the respondent vide sale deed in view of
compromise decree passed by the High Court - Substitution of
respondent in place of the original lessee - Payment of charges for
conversion from leasehold to freehold by respondent - Dismissal of
second appeal by High Court holding that acceptance of rent by
DDA pursuant to a demand made by it amounts to a renewal of              E
lease in respect of the property - On appeal, held: Property is a
Public Premises in terms of s.2(e)(3)(ii) of the 1971 Act - There
cannot be an automatic renewal of lease in favour of the original
lessee once it stands terminated by efflux of time and also by issuing
notice terminating the lease - Merely accepting the amount towards       f
the rent by DDA after expiry of the lease period would not be
construed as renewal of lease for another period of 20 years -
Also the original lessee failed to remedy the breaches -In the absence   ~
of renewal of lease, status of the original lessee, in relation to the
property was that of an unauthorised occupant in terms of s. 2(g)
of the 1971 Act- Person having no right, title or interest in the        ·a
property cannot transfer the same by ·way of sale deed - Sale of the
 property by the original lessee in favour of the respondent was not
 a valid assignment of his right in respect of the same, thus, not
 binding on the DDA - Deposition of conversion charges of the said
 property from lease hold to free hold right to DDA also not of any      H
                                 787
788            SUPREME CQl,,<. l REPORTS                  [20 l 6] l S.CR.


A     help to respondent - Thus, the order passed by the High Court set
      aside - DDA to take the possession of the property without resorting
      to eviction proceedings - DDA entitled for the recovery of damages
      from both, the original lessee or his legal heirs and the respondent
      - Public Premises (Eviction of Unauthorised Occupants) Act, 1971
      - ss. 2(e){3){ii), 2(g) - Delhi Development Authority (Disposal of
B
      Developed Nazu/ Land) Rules, 1981 - r. 43.
            Allowing the appeal, the Court
             HELD: 1.1 The concurrent findings recorded by the courts
      below declaring the termination notice dated 01.09.1972,
c     terminating the lease of the property in qnestion granted in favour
      of the original lessee, served by the DDA to the original lessee,
      as illegal, arbitrary and without jnrisdiction on the erroneous
      assumption of the non-existent fact that there has been a renewal
      of the lease for the reason that the original lessee applied for the
      renewal of the lease within time as stipulated in the clause IIl(b)
D     of the lease deed and has been paying rent for the property in
      question to the office of the DDA. The said conclusion of the
      courts below is erroneous in law as it is contrary to the Clause
      Ill (b) of the lease deed and also Sections 21(1) and 22 of the
      Delhi Development Act, 1957 read with Rule 43 of the Delhi
 E    Development Authority (Disposal of Developed Nazul Land)
      Rules, 1981. [Para 24] [799-B-D]
            1.2 The Transfer of Property Act, 1882 is not applicable in
      respect of the public premises. The property in question is public
      premises by virtue of Section 2(e)(3)(ii) of the Public Premises
 F    (Eviction of Unauthorised Occupants) Act, 1971. In the instant
      case, as per clause III(b) of the lease deed and Sections 21 and
      22 of the DD Act read with Rule 43 of the Nazul Land Rules and
      inJhe light of *Slianti Prasad Devi, **Sarup Singli Gupta and
      *** Aslioka Marketing Ltd. cases, there cannot be an automatic
      renewal of lease in favour of the original lessee once it stands
 G    terminated by efflux of time and also by issuing notice terminating
      the lease. Merely accepting the amount towards the rent by the
      office of the DDA after expiry of the lease period shall not be
      construed as renewal of lease of the premises, in favour of the
      original lessee, for another period of 20 years. [Para 25] [802-G;
      803-A-B]
 H
    DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ                              789
                AGENCIES PVT. LTD.

      Shanti Prasad Devi & Am: v. Shankar Mahto & Ors.                    A
      2005 (1) Suppl. SCR 418: (2005) 5 SCC 543; Sarup
      Singh Gupta v. S. Jagdish Singh & Ors. (2006) 4 SCC
      205; Ashoka Marketing Ltd & Anr. v. Punjab National
      Bank & Ors. 1990 (3) SCR 649:(1990) 4 SCC 406 -
      relied on.                                                          B
      1.3 Since, the power conferred by the DD Act upon DDA to
grant lease includes renewal of lease and in the absence of such
a renewal of lease of the property in question in favour of the
original lessee, as required in law, there cannot be an automatic
renewal of the same in his favour. The non-grant of renewal of
lease in favour of the original lessee is very clear from the fact        c
that the original lessee failed to remedy the breaches pointed
out by the DDA in its show cause notices dated 09.02.1968 and
16.02.1968 and further made very clear from the issuance of
termination notice dated 01.09.1972, whereby the DDA has
conveyed its clear intention of non-renewal Qf the lease of the           D
property in question. (Para 27) (803-F-G)
      1.4 It is clear that in the absence of renewal of lease, the
status of the original lessee, in relation to the property in question,
is that of an unauthorised occupant as he had continued in
occupation of the property in question as an 'unauthorized person'         E
in terms of Section 2(g) of the Public Premises (Eviction of
Unauthorised Occupants) Act, 1971. [Para 28) (804-D)
      1.5 In the absence of renewal of lease after 10.8.1968, the
pleadings of the original lessee that the DDA is estopped from
taking the plea that there is no renewal of lease after having             F
accepted the rent after 10.8.1968, in respect of property in
question and after accepting certain sums in respect of the same,
subsequently, for change of the property in question from
leasehold to freehold are all irrelevant aspects for the reason
that the same are contrary to the said provisions of the DD Act,
the Nazul Land Rules applicable to the fact situation and the terms        G
and conditions of the lease deed. Further, it is clear from the
contents of the termination notice dated 01.09.1972 served upon
the original lessee by the DDA that it has not only refused to
 renew the lease of the property but also asked the original lessee
to hand over the possession of the property in question within 30          H
790           SUPREME COURT REPORTS                       [2016] l S.C.R.


A     days, which is absolutely in consonance with Section 5 of the 1971
      Act. [Para 29] [804-F-H; 805-A)
             1.6 Without examining the case in m• .,roper perspective
      that the property in question being a Public Premises in terms of
      Section 2(e) of the 1971 Act and that after expiry of lease period
 B    the original lessee has become unauthorized occupant in terms
      of Section 2(g) of the Act in the light of relevant statutory
      provisions and rules and law laid down by the Constitution Bench
      of this Court in Asltoka Marketin1: Ltd. & Anr. case, the concurrent
      findings of the courts below is not only erroneous but also suffers
      from error in law. [Para 30] [805-B-C)
c
             1.7 The grant of perpetual injunction by the trial court in
      favour of original lessee, restraining the DDA from taking any
      action under the said termination notice dated 01.09.1972, on
      the ground that the termination notice dated 01.09.1972 being
      illegal, arbitrary and without jurisdiction and the affirmation of
D     the same by both the first appellate court, i.e., by the ADJ and
      further by the High Court by its judgment and order are not only
      erroneous but also suffers from error in law. [Para 31] (805-D]
            2.1 The High Court's order whereby the respondent was
      substituted in place of the original lessee on its application under
 E    Order 22 Rule 10 CPC for the reason of execution of sale deed
      by the original lessee in favour of the respondent by entering
      into compromise between them in Suit is also bad in law. The
      sale of the property in question to give effect to the compromise
      decree in the said suit is void ab initio in law for the reason that
 F    the original lessee, in the absence of renewal of lease in his favour
      himself had no right, title or interest, at the time of execution of
      sale deed, in respect of the property in question. The person
      having no right, title or interest in the property cannot transfer
      the same by way of sale deed. Thus, the sale of the property by
      the original lessee in favour of the respondent is not a valid
 G    assignment of his right in respect of the same. The sale deed is
      not binding on the DDA. [Para 32] (805-E-G]
           2.2 In the absence of renewal of lease of tlie property by
      the DDA, the original lessee himself becomes an unauthorised
      occupant of the property in question. The deposition of
 H    conversion charges of the property from lease hold to free hold
    DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ                            791
                AGENCIES PVT. LTD.

right in respect of the same to the office of the DDA cannot help       A
the respondent in claiming any right with respect to the property
in qnestion. The instant case having pecnliar facts and
circnmstances, namely, after 10.08.1968 the lease stands
terminated by efflux of time, which is further evidently clear from
the termination notice dated 01.09.1972 and thereafter, the
                                                                        B
original lessee becomes an unauthorised occupant in terms of
Section 2(g) of the 1971 Act and consequently, not entitled to
deal with the property in any manner. The very concept of
conversion of leasehold rights to freehold rights is not applicable.
[Para 33] [806-B-D]
      2.3 The original lessee has been in unauthorised occupation       c
of the property in question for around 30 years (till he executed
a sale deed in favour of the respondent) and the respondent has
been illegally inducted in possession of the same, by the original
lessee, who himself was in unauthorised possession of the
property. For around 17 years the respondent has been enjoying          D
the property in question without any riglit, title or interest. Thus,
both are liable to pay the damages for unauthorised occupation
and the DDA is empowered under Section 7 of the 1971 Act to
claim damages from them. The concurrent finding is not only
erroneous but also suffers from error in law in granting decree of
permanent injunction in favour of the respondent who is not              E
entitled in law for the same. There is a miscarriage of justice in
granting the relief by the courts below in favour of the respondent.
 [Para 34] [806-E-G]
      2.4 The impugned judgment and decree of the High Court
affirming the judgments and decrees of the First Appellate Court        F
and the Trial Court is set aside. The DDA is allowed to take the
possession of the property in question immediately without
resorting to eviction proceedings, as the respondent has been in
unauthorised possession of the property in question, by virtue of
erroneous judgments passed by the courts below and dispose of           G
the same. The DDA is entitled for the recovery of damages from
both, the original lessee or his legal heirs and the respondent.
The amount which has been deposited, with the DDA, by the
respondent as conversion charges is to be adjusted towards the
damages. The costs of Rs.1 lakh is awarded to the DDA, payable
by the respondent for these proceedings. [Para 35) [807-B-F)             H
792            SUPREME COURT REPORTS                         [2016) 1 S.C.R.


A                             Case Law Reference
      2005 (1) Suppl. SCR 418                relied on.         Para 25
      (2006) 4 sec 205                       relied on.         Para 25
      1990 (3) SCR 649                       relied on.         Para 25
           CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3783
B
      of2016
            From the Judgment and Order dated 31.05.2011 of the High Court
      of Delhi at New Delhi in RSA No. 6 of 1983.
            Ashwani Kumar and Rahul Bhatia for the Appellant.
c           C. S. Vaidyanathan,Anuradha Mukherjee, Nikhil Nayyar, Shreya
      S., Dhananjay Baijal, N. Sai Vinod for the Respondent..
            The Judgment of the Court was delivered by
            V. GOPALA GOWDA, J. 1. Leave granted.
D            2. This appeal by special leave is directed against the impugned
      judgment and order dated 31.05.2011 passed by the High Court of Delhi
      at New Delhi in RSA No. 6 of 1983, wherein the High Court has
      dismissed the second appeal filed by the appellant-Authority (hereinafter
      called "ODA") holding that acceptance ofrent, in the instant case, by
      the DOA pursuant to a demand made by it amounts to a renewal of
 E
      lease in respect of the property in question.
            3. Brief facts are stated hereunder to appreciate the rival legal
      contentions urged on behalfofthe parties:
            The Delhi Improvement Trust vide lease deed dated 06.01.1951
 F    granted lease of plot no.2, Jhandewalan, "E" Block, Delhi in favour of
      original lessee Balraj Virmani. After enactment of the Delhi Development
      Act, 1957, the DOA was constituted by notification of the Central
      Government and by virtue of Section 60 of the aforesaid Act, all
      properties, movable or immovable, vested in the Delhi Improvement Trust
      came to be vested in the ODA.
 G
             4. The lease in respect of property in question was initially for a
      period of 20 years i.e., w.e.f. 11.08.1948 to 10.08.1968 and the same
      was liable to be extended for a further period·of20 years at the option of
      lessee in accordance with the terms and conditions contained therein.
      Clause (vi) of the lease deed is a relevant condition, which reads as
 H    under:
    DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ                                   793
      AGENCIES PVT. LTD. [V. GOPALA GOWDA, J.]

      "vi) not to use the said land and buildings that may be erected          A
      thereon during the said term for any other purpose other than for
      the purpose of cold storage plant without the consent in writing of
      the said lessor; provided that the lease shall become void if the
      land is used for any purpose other than that for which the lease is
      granted not being a purpose subsequently approved by the lessor".
                                                                               B
Clause III(b) is another relevant condition which reads thus:
      "IlI(b) in case this lease with the lessee shall continue for the said
      period of20 years and provided the lessee has observed performed
      and complied with the terms and covenants, conditions and options
      to renew the lease on such terms and conditions as the lessor            c
      deems fit for further period of 20 years, provided that the notice
      of the intention of the lessee to exercise this option of renewal is
      given to the lessor six months before the expiration of the lease;
      provided further that if the lease is extended for a further period
      20 years the lessor shall have the right to enhance the rental upto
      50% at the original rent."                                               D

      5. On 23.02.1967, the original lessee approached the DDA for
renewal of his lease. The DOA served a show cause notice dated
16.02.1968 to the original lessee for breach of the terms and conditions
contained in the lease deed committed by him with respect to the lease.
Following breaches were pointed out in the aforesaid show cause notice:         E
      a. The mezzanine floor of the said building being used for printing
      press and office purposes by different tenants in contravention of
      the clause \(vi) and (vii) of the lease deed.
      b. Cold storage has been sublet to Mis Baikunth cold storage since
                                                                               F
      December, 1965 in contravention of clause 1(vii) of the lease deed.
      c. Portion of mezzanine floor being used for residential purposes
      by the cold storage staff in contravention of clause \(xv) of the
      lease deed.
      d. Only single storey building stands .on the plot in place of four      G
      storied building in contravention of clause l(xv)(c) of the lease
      deed.
      By the said notice, 15 days time was given to the original lessee tp
remedy the breaches as pointed out in the show cause notice. The original
lessee replied to the said show cause notice through various                   H
794            SUPREME COURT REPORTS                           [2016] l S.C.R.


A     communications dated 01.03.1968, 26.06.1968and01.07.1968. However,
      no further communication was issued by the DDA in this regard.
             6. The DDA vide notice dated 01.09.1972 terminated the lease of
      the said land on account of non-observation of the terms and conditions
      contained in the lease deed.
B            7. Aggrieved by the decision of the DDA, the original lessee filed
      original suit for perpetual injunction bearing no. 47of1975 before the
      Sub-Judge, Delhi seeking restraining order against the ODA. The learned
      Sub-Judge vide judgment and order dated 07.03.1981 decreed the said
      suit in favour of the original lessee. The learned Sub-Judge has found
c     notice dated 01.09.1972 of the DDA to be arbitrary, illegal and without
      jurisdiction.
            8. Aggrieved by the decision of the learned Sub-Judge, the DDA
      preferred the First Appeal vide RCA No. 75of1982 before the Court of
      Additional District Judge (ADJ), Delhi. The learned ADJ vide judgment
D     and order dated 29.09.1982 dismissed the appeal and affirmed the
      judgment and order passed by the trial court.
             9. Aggrieved by the said judgment of the learned ADJ, ODA
      preferred the Second Appeal vide RSA No. 06of1983, before the High
      Court of Delhi at New Delhi. During the pendency of the said second
 E    appeal an application vi de CM No. 13336 of 2007 was moved under
      Order 22 Rule 10 of the CPC for substitution ofM/s Anant Raj Agencies
      Pvt. Ltd.-the respondent herein in place of original lessee-Balraj Virmani.
      In the said application it was urged that the property in question had
      been purchased by the respondent vide sale deed in view of compromise
      decree dated 22.06.1988 passed by the High Court in terms of settlement
 F    between the original lessee and the respondent herein. The High Court
      vi de order dated 03 .11.2009 substituted the respondent in place of the
      original lessee-Balraj Virmani in the second appeal proceedings.
             10. During the pendency of the said RSA No. 6 of 1983, the
      respondent applied to ODA for conversion of the said premises from
 G    leasehold to freehold vide application dated 26.03.2004. The respondent
      deposited a sum of Rs.96,41,982/- towards conversion charges as per
      the policy applicable, but the request for conversion was rejected by the
      DDA. Being aggrieved by the said decision, the respondent preferred
      writ petition being CWP No. I 0015 of 2005 before the High Court of
      Delhi praying for directions to be issued to the ODA to consider the
 H
    DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ                                    795
      AGENCIES PVT. LTD. [V. GOPALA GOWDA, J.]

request of the respondent and grant conversion of the said premises             A
from leasehold to freehold. The High Court by its order dated 19 .07 .2007
disposed of the said writ petition by directing DOA to decide the matter
ofconversion within a period of8 weeks after the disposal of RSA No.
6ofl983.
       11. The High Court by its judgment and order dated 31.05.2011            B
has dismissed RSA No. 6of1983 filed by the DDA holding that its act
of demanding and accepting rent tantamounts to renewal of lease in
respect of the property in question. Hence, this appeal by way of special
leave has been filed by the ODA raising certain substantial questions of
law urging various grounds.
                                                                                c
       12. Mr. Ashwani Kumar, the learned counsel appearing on behalf
of the DDA contended that the High Court has failed to appreciate that
the originai lessee has admittedly breached the terms and conditions
contained in the lease deed and thus, not entitled to the renewal of the
same in his favour.
                                                                                D
       13.lt was further contended by the learned counsel that the High
Court has erred in not appreciating that both the courts below have
proceeded on wrong interpretation of clause Ill (b) of the lease deed
dated 06.01.1951 thatthe lease was unilaterally renewable at the option
of the lessee in respect of the leased property in favour of the original
lessee.                                                                          E
       14. The learned counsel further contended that after the
admission of the breaches, in respect oftenns and conditions set out in
the lease deed referred to supra, by the original lessee as pointed out in
the show cause notice dated 16.02.1968, the same was not condoned by
the DDA. In such a situation it is not right on the part of the trial court,     F
the first appellate court and the High Court to hold that there was
automatic renewal of the lease of the property in question only for the
reason that the rent was deposited by the Jessee in the office of the
DDA.
        15. It was further contended by the learned counsel that the High       G
Court has failed to appreciate that the original lessee created an interest
in the said property, in favour of third party-respondent, during the period
when he was no more a lease holder, in respect of the said property, by
virtue of detennination oflease in his favour by eftlux of time. Therefore,
the original lessee, having no right, title or interest in the said property,
                                                                                H
796             SUPREME COURT REPORTS                           [2016] l S.C.R.


A     could not have transferred the said property to the respondent and
      therefore, the alleged transfer of the property in question in his favour is
      void and the same is not binding upon the DDA.
             16. The learned counsel further contended that the High Court
      has failed to appreciate that the deposit of the rent by the original lessee
B     and its acceptance by the office of the DDA is administrative in nature
      and would not be construed as an estoppel or waiver of the DDA's right
      in respect of the property in question unless a specific intention to this
      effect is communicated to the original lessee.
             17. Per contra, Mr. C.S. Vaidyanathan, the learned senior counsel
c     appearing on behalf of the respondent contended that the present appeal
      is not maintainable as the DDA itself has intentionally acquiesced and
      agreed to the original lessee's continued use of the said property after
      the expiry of first term oflease on 10.08.1968. It was further submitted
      that the DOA after more than one year of the expiry of the first term of
      lease demanded rent in respect of the said property vide notice dated
D     03 .10.1969, pursuant to which payments towards rent were made by
      the original lessee. The learned senior counsel further emphasised upon
      the point that the instant case differs from those cases where rent is
      tendered by the lessee sans demand from the lessor. He further submitted
      that the acceptance ofrent by the DOA on various occasions pursuant
 E    to demand made by it, clearly proves the intention of the ODA that the
      lease is renewed in favour of the original lessee.
             18. It was further contended by him that in view of the settled
      principle of law as well as the precedents laid down by this Court in a
      catena of cases that the exercise of option for renewal cannot be stalled
 F    on account of the alleged breaches of the terms and conditions of the
      lease when no steps were taken by the DOA to assert its right and
      power in respect ofre-entry into the property in question till the option
      for renewal of lease exercised by the lessee and therefore, this appeal is
      not maintainable in law as no substantial question of law arises for
      consideration of this Court in exercise of its appellate jurisdiction. It was
 G    further submitted by him that in the instant case, the ODA issued show
      cause notice dated 16.02.1968 to the original lessee informing him of
      four breaches of terms and conditions contained in the lease deed
      allegedly committed by him. The original lessee made detailed replies to
      the said notice vide communications dated Ol .03.1968, 26.06.1968 and
      01.07.1968. The ODA after receiving the replies from the original lessee
 H
    DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ                                   797
      AGENCIES PVT. LTD. [V. GOPALA GOWDA, J.]

neither communicated nor took any action to take the possession of the         A
property in question and therefore, the conclusion that the DOA was
satisfied with the replies made by the original lessee can be safely arrived
at. In fact, the demand ofrent by the office of the DOA on 03.10.1969
was immediately acceded. It was further submitted that in view of the
aforesaid it can be safely concluded that after the expiry of the first
                                                                               B
term of the lease and acquiescence of the ODA in Jetting the original
lessee to continue in possession of the said property, the lessee became
a tenant at will in respect of the said property. Therefore, the impugned
judgment and order passed by the High Court is not bad in law and thus,
interference by this Court with the same is not warranted.
       19. With respect to the substitution of the respondent in place of
                                                                               c
the original lessee, during pendency of the second appeal, it was submitted
by the learned senior counsel that the said substitution of party was
allowed by the High Court vide order dated 03.11.2009 in RSA No. 06
of 1983. The DOA did not even file a reply to the application for
substitution filed by the respondent and therefore, it is estopped from        D
questioning such substitution of the respondent in place of original lessee.
It was further submitted by him that the order dated 03 .11.2009 has not
been challenged by the DOA and therefore, it has no right to raise any
new plea in this regard at this stage.
      20. The learned senior counsel further submitted that the DOA             E
has deliberately and intentionally suppressed and concealed material fact
from this Court i.e., the policy of the DOA for conversion of the property
from leasehold to freehold is under consideration and the same is clear
from the communication dated 22.01.2008 sent by the DOA to the
respondent. He further submitted that admittedly, the ODA has not
refunded the amount ofRs.96,41,982/-deposited by the respondent as             F
conversion charges.
       21. While concluding his contentions the learned senior counsel
submitted that the courts below have rightly rejected the case of the
ODA while holding the notice dated 01.09.1972, whereby it sought to
determine the lease of the original lessee, arbitrary, illegal and without     G
jurisdiction. The High Court has correctly held that the acceptance of
rent by the office of the DOA, in respect of the said property, pursuant
to the demand made by the office of the ODA amounts to renewal of
lease in the instant case and therefore, no interference with the impugned
judgment and order by this Court in exercise of its appellate jurisdiction
                                                                               H
798              SUPREME COURT REPORTS                         [2016) l S.C.R.



A     under Article 136 of the Constitution oflndia is required.
             22. On the basis of the aforesaid rival legal contentions urged on
      behalf of the parties the following points would arise for consideration of
      this Court:
            1.     Whether the original lessee has acquired any right, in respect
B                  of the property in question after the termination oflease by
                   efflux of time on 10.08.1968 and also by termination notice
                   dated 01.09. 1972, in the absence of renewal of lease by
                   the DOA in writing as provided under Clause III(b) of the
                   lease deed, by virtue of payment ofrent in the office of the
c                  DOA?
            2.     Whether the respondent herein acquires any right in respect
                   of property in question by getting substituted in place of the
                   original lessee by virtue of a compromise decree, between
                   the original lessee and the respondent, based on a sale deed
D                  dated 14.10.1998 executed by the original lessee, by invoking
                   Order 22 Rule 10 of the CPC during the pendency of the
                   appeal before the High Court?
            3.     What order?
            Answer to Point No.1
 E
             23. After careful examination of the material facts and evidence
      on record it is clear that on the basis of the admitted facts, the lease of
      the property in question is not renewed by the DOA in favour of the
      original lessee, in accordance with clause lll(b) of the lease deed dated
      06.01.1951. From a reading of the said lease deed it becomes very clear
 F    that the original lease period was initially for a period 20 years, which
      period expired on 10.08.1968 as the lease period commenced w.e.f.
      11.08.1948. No doubt, the original lessee availed his option of the renewal
      of lease as provided in the lease deed by making a request to the DOA
      vide his letter dated 23.2.1967, but the same was not acceded to by the
      DDA. Before expiry of the original lease period, notices were issued by
 G
      the office ofDDA on 09.02.1968 and 16.02.1968 to the original lessee
      alleging certain breaches of the terms and conditions (extracted above)
      of the lease deed. The original lessee was given 15 days time to remedy
      the said breaches. Though the original lessee made several replies to the
      aforesaid notices but he had failed to rectify the said breaches notified
 H    to him. Therefore, the ODA vide notice dated 01.09.1972 decided not to
                                                                                     \



       DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ                                799
         AGENCIES PVT. LTD. [V. GOPALA GOWDA, J.]

renew the lease of the property in question and terminated the lease in        A
respect of the same, though in Jaw the same was not even required on
the part of the DDA in view of the conditions of the lease deed as after
the expiry of the original period of lease it stands terminated by efflux of
time.
       24. The concurrent findings recorded by the courts below                B
declaring the termination notice dated 01.09.1972, terminating the lease
of the property in question granted in favour ofthe original lessee, served
by the DDA to the original lessee, as illegal, arbitrary and without
jurisdiction on the erroneous assumption of the non-existent fact that
there has been a renewal of the lease for the reason that the original
lessee applied for the renewal of the lease within time as stipulated in       c
the clause III(b) (supra) of the lease deed and has been paying rent for
the property in question to the office of the DDA. In our view, the said
conclusion of the courts below is erroneous in law as it is contrary to the
Clause III (b) of the lease deed and also Sections 21 ( 1) and 22 of the
Delhi Development Act, 1957 (for short the "DD Act") read with Rule            D
43 of the Delhi Development Authority (Disposal of Developed Nazul
Land) Rules, 1981 (for short the "Nazul Land Rules"). In this regard, it
would be necessary for this Court to refer to the decision relied upon by
the learned counsel for the appellant, in the case of Shanti Prasad Devi
&Am: v. Sllankar Maftto & Ors. 1 wherein this Court, while interpreting
 Section 116 of the Transfer of Property Act, 1882 with regard to its           E
applicability and the effect of"holding over", held that it is necessary to
obtain assent of the landlord for continuation oflease after the expiry of
lease period and mere acceptance of rent by the lessor, in absence of
agreement to the contrary, for subsequent months where lessee continues
to occupy lease premises cannot be said to be conduct signifying assent         F
 on its part. The relevant paras 18 and 19 of the case are extracted
 below:-
         "18. We fully agree with the High Court and the first appellate
         court below that on expiry of period of lease, mere acceptance of
         rent for the subsequent months in which the lessee continued to        G
         occupy the lease premises cannot be said to be a conduct signifying
         "assent" to the continuance of the lease even after expiry of lease
         period. To the legal notice seeking renewal of lease, the lessor
         gave no reply. The agreement of renewal contained in clause (7)
         read with clause (9) required fulfilment of two conditions: first,
 1
     t2oosi s sec 543                                                          H
800            SUPREME COURT REPORTS                              [2016] I S .C.R.


A           the exercise of option of renewal by the lessee before the expiry
            of original period of lease and second, fixation of terms and
            conditions for the renewed period of lease by mutual consent and
            in absence thereof through the mediation of local mukhia or
            panchas of the village. The aforesaid renewal clauses (7) and
            (9) in the agreement of lease clearly fell within the expression
B
            "agreement to the contrary" used in Section 116 of the Transfer
            of Property Act. Under the aforesaid clauses option to seek
            renewal was to be exercised before expiry of the lease and on
            specified conditions.
            19. The lessor in the present case had neither expressly nor
c           impliedly agreed for renewal. The renewal as provided in the
            original contract was required to be obtained by following a
            specified procedure i.e. on mutually agreed terms or in the
            alternative through the mediation of Mukhias and Panchas. In
            the instant case, there is a renewal clause in the contract prescribing
D           a particular period and mode of renewal which was "an agreement
            to the contrary" within the meaning of Section 116 of the Transfer
            of Property Act. In the face of specific clauses (7) and (9) for
            seeking renewal there could be no implied renewal by "holding
            over" on mere acceptance of the rent offered by the. lessee. In
            the instant case, option of renewal was exercised not in accordance
 E          with the terms ofrenewal clause that is before the expiry oflease.
            It was exercised after expiry oflease and the lessee continued to
            remain in use and occupation of the leased premises. The rent
            offered was accepted by the lessor for the period the lessee
            overstayed on the leased premises. The lessee, in the above
 F          circumstances, could not claim that he was "holding over" as a
            lessee within the meaning of Section 116 of the Transfer of Property
            Act."
                                              (emphasis supplied by this Court)
      To the same effect, the learned counsel has further, rightly placed reliance
 G    on another decision of this Court in the case of Sarup singfl Gupta v.
      S. Jagdis/1 Singfl & Ors', wherein this Court has held as under:-
             "8 .. .In our view, mere acceptance of rent did not by itself constitute
             an act of the nature envisaged by Section 113. Transfer of Propertv
             Act showing an intention to treat the lease as subsisting. The fact
 H    ' (2006) 4 sec 20s
    DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ                                801
      AGENCIES PVT. LTD. [V. GOPALA GOWDA, J.)

      remains that even after accepting the rent tendered, the landlord     A
      did file a suit for eviction, and even while prosecuting the suit
      accepted the rent which was being paid to him by the tenant. It
      cannot, therefore, be said that by accepting rent, he intended to
      waive the notice to quit and to treat the lease as subsisting. We
      cannot ignore the fact that in any event, even if rent was neither
                                                                            B
      tendered nor accepted, the landlord in the event of success would
      be entitled to the payment of the arrears of rent. To avoid any
      controversy. in the event of termination of lease the practice
      followed by the courts is to permit the landlord to receive each
      month by way of compensation for the use and occupation of the
      premises. an amount equal to the monthly rent payable by the          c
      tenant. It cannot, therefore, be said that mere acceptance of rent
      amounts to waiver of notice to quit unless there be any other
      evidence to prove or establish that the landlord so intended ... "
                                     (emphasis supplied by this Court)
       25. Further, in the case ofAslwka Marketinl( Ltd. & Anr.       v.    D
Punjab National Bank & Ors.!, wherein the question for consideration
was whether the provisions of Public Premises (Eviction of Unauthorised
Occupants) Act, 1971 overrides the provisions of Delhi Rent Control
Act, 1958, the Constitution Bench of this Court after interpretation of
the relevant provisions of both the Acts has clearly held that the Public    E
Premises (Eviction of Unauthorised Occupants) Act, 1971 must prevail
over the Rent Control Act. The relevant paras 55 and 70 of the decision
read thus:
      "55. The Rent Control Act makes a departure from the general
      law regulating the relationship oflandlord and tenant contained in . p
      the Transfer of Property Act inasmuch as it makes provision for
      determination of standard rent, it specifies the grounds on which
      a landlord can seek the eviction of a tenant, it prescribes the forum
      for adjudication of disputes between landlords and tenants and
      the procedure which has to be followed in such proceedings. The
      Rent Control Act can, ~herefore, be said to be a special statute G
      regulating the relationship of landlord and tenant in the Union
      territory of Delhi. The Public Premises Act makes provision for a
      speedy machinery to secure eviction of unauthorised occupants
      from public premises. As opposed to the general law which

' (1990J 4 sec 406                                                          H
802            SUPREME COURT REPORTS                           (2016] I S.C.R.


A           provides for filing of a regular suit for recovery of possession of
            property in a competent court and for trial of such a suit in
            accordance with the procedure laid down in the Code of Civil
            Procedure, the Public Premises Act confers the power to pass an
            order of eviction of an unauthorised occupant in a public premises
            on a designated officer and prescribes the procedure to be followed
B
            by the said officer before passing such an order. Therefore, the
            Public Premises Act is also a special statute relating to eviction of
            unauthorised occupants from public premises. In other words, both
            the enactments, namely, the Rent Control Act and the Public
            Premises Act, are special statutes in relation to the matters dealt
c           with therein. Since, the Public Premises Act is a special statute
            and not a general enactmentthe exception contained in the principle
            that a subsequent general law cannot derogate from an earlier
            special law cannot be invoked and in accordance with the principle
            that the later laws abrogate earlier contrary laws, the Public
            Premises Act must prevail over the Rent Control Act.
D
            70 ..... .Jn our opinion, the provisions of the Public Premises Act,
            to the extent they cover premises falling within the ambit_ of the
            Rent Control Act, override the provisions of the Rent Control Act
            and a person in unauthorised occupation of public premises under
            Section 2( e) of the Act cannot invoke the protection of the Rent
 E          Control Act."
      The Transfer of Property Act, 1882 is a general law governing the landlord
      and the tenant relationship in general. The specific Rent Control Acts
      are advancement over the Transfer of Property Act, thereby providing
      more protection to the tenant from arbitrary increase of rent and ejectment
 F    from the rented premises by the landlord. Thus, in the light ofthe aforesaid
      case law, it can be concluded that the Transfer of Property Act, 1882 is
      not applicable in respect of the public premises. The property in question
      is public premises by virtue of Section 2(e)(3)(ii) of the Public Premises
      (Eviction of Unauthorised Occupants) Act, 1971, which is reproduced
 G    hereunder:
             "2(e) "public premises" means-
             (3) in relation to the [National Capital Territory of
             Delhi]-
             (ii) any premises belonging to the Delhi Development
             Authority, whether such premises are in the possession
 H
             of, or leased out by, the said Authority; .... "
    DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ                                   803
      AGENCIES PVT. LTD. [V. GOPALA GOWDA, J.]

Therefore, in the instant case, as per clause IIl{b) of the lease deed and     A
Sections 21 and 22 of the DD Act read with Rule 43 of the Nazul Land
Rules and in the light of Shanti Prasad Devi, Sarup Singh Gupta and
Aslwka Marketing Ltd. cases (supra), there cannot be an automatic
renewal oflease in favour of the original lessee once it stands terminated
by efflux of time and also by issuing notice terminating the lease. Merely
                                                                               B
accepting the amount towards the rent by the office of the DDA after
expiry of the lease period shall not be construed as renewal of lease of
the premises in question, in favour of the original lessee, for another
period of 20 years as contended by the respondent.
      26. Further, the property in question, vested in the DOA, is a
Nazul land, a developed land as is defined under Rule 2(i) of the Nazul        c
Land Rules, which reads thus:
      "Nazul land" means the land placed at the disposal of the Authority
      and developed by or under the control and supervision of the
      Authority under section 22 of the Act"
                                                                               D
       27. Section 3(2) of the DD Act says the Authority shall be a
body corporate by the name Delhi Development Authority (ODA).
Section 21 of the DD Act empowers the ODA in respect of the disposal
of the land and sub-section (3) of Section 21 makes it very clear that
nothing in the aforesaid Act shall be construed as enabling the Authority
or the local Authority concerned to dispose of the land by way of gift,         E
mortgage or charge but subject to certain reference in the DD Act with
regard to the disposal of land shall be construed as reference to the
disposal thereof in any manner, whether by way of sale, exchange or
lease or by creation of any easement right or privilege or otherwise.
Since, the power conferred by the DD Act upon ODA to grant lease               F
includes renewal oflease and in the absence of such a renewal oflease
of the property in question in favour of the original lessee, as required in
law, there cannot be an automatic renewal of the same in his favour.
The non-grant ofrenewal oflease in favour of the original lessee is very
clear from the fact that the original lessee failed to remedy the breaches
pointed out by the DOA in its show cause notices dated 09.02.1968 and          G
16.02.1968 and further made very clear from the issuance of termination
notice dated 01.09.1972, whereby the ODA has conveyed its clear
intention of non-renewal of the lease of the property in question. The
relevant portion of the aforesaid termination notice reads thus:
                                                                               H
804            SUPREME COURT REPORTS                          [2016) I S.C.R.


A           "7. And whereas since you have failed to observe perform and
            comply with the terms and covenant, conditions of the above lease
            the said breaches still continue. It has been decided not to renew
            the lease for further period."
             Thus, it is abundantly clear from the aforesaid legal statutory
 B    provisions of the DD Act and terms and conditions of the lease deed and
      the case law referred supra that there is no automatic renewal of lease
      of the property in question in favour of the original lessee. Therefore,
      the concurrent findings of the courts below on the contentious issue in
      the impugned judgment are not only erroneous but also error in law and
      hence, the same cannot be allowed to sustain in law and liable to be set
 c    aside.
            28. From the above discussion, it is clear that in the absence of
      renewal of lease, the status of the original lessee, in relation to the
      property in question, is that of an unauthorised occupant as he had
      continued in occupation of the property in question as an 'unauthorized
D     person' in terms of Section 2(g) of the Public Premises (Eviction of
      Unauthorised Occupants) Act, 1971, which reads as under:
            "2(g) "unauthorised occupation", in relation to any public premises,
            means the occupation by any person of the public premises without
            authority for such occupation, and includes the continuance in
 E          occupation by any person of the public premises after the authority
            (whether by way of grant or any other mode of transfer) under
            which he was allowed to occupy the premises has expired or has
            been determined for any reason whatsoever."
             29. In the absence of renewal of lease after I 0.8.1968, the
 F    pleadings of the original lessee that the DOA is estopped from taking the
      plea that there is no renewal of lease after having accepted the rent
      after 10.8.1968, in respect of property in question and after accepting
      certain sums in respect of the same, subsequently, for change of the
      property in question from leasehold to freehold are all irrelevant aspects
 G
      for the reason that the same are contrary to the aforesaid provisions of
      the DD Act, the Nazul Land Rules applicable to the fact situation and
      the terms and conditions of the lease deed. Further, it is clear from the
      contents of the termination notice dated 01.09 .1972 served upon the
      original lessee by the DOA that it has not only refused to renew the
      lease of the property but also asked the original lessee to hand over the
 H    possession of the property in question within 30 days, which is absolutely
     DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ                                      805
       AGENCIES PVT. LTD. [V. GOPALA GOWDA, J.]

in consonance with Section 5 of the Public Premises (Eviction of                   A
Unauthorised Occupants) Act, I 971.
       30. Without examining the case in the proper perspective that
the property in question being a Public Premises in terms of Section 2( e)
of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971
and that after expiry of lease period the original lessee has become               B
unauthorized occupant in terms of Section 2(g) of the said Act in the
light of relevant statutory provisions and rules referred to supra and law
laid down by the Constitution Bench of this Court in the Case of Ashok<1
M<1rketing Ltd. & Anr. (supra), the concurrent findings of the courts
below on the contentious issue is not only erroneous but also suffers
from error in law and therefore, liable to be set aside.                           c
       31. The grant of perpetual injunction by the Trial Court in favour
of original lessee, restraining the DOA from taking any action under the
said termination notice dated 01.09.1972, on the ground that the termination
notice dated 01.09.1972 being illegal, arbitrary and without jurisdiction
and the affirmation of the same by both the first appellate court, i.e., by        D
the learned ADJ and further by the High Court by its impugned judgment
and order are not only erroneous but also suffers from error in law.
Thus, Point no. I is answered in favour of the appellant.
       Answer to Point no.2
                                                                                    E
         32. The High Court's order dated 03.11.2009 whereby the
 respondent was substituted in place of the original lessee on its application
 under0rder22 Rule 10 ofCPC forthe reason of execution of sale deed
 dated 14.10.1998 by the original lessee in favour of the respondent by
 entering into compromise between them in Suit No. 60 I of 1984 is also
 bad in law. The sale of the property in question to give effect to the             F
  compromise decree in aforesaid suit is void ab initio in law for the
  reason that the original lessee, in the absence of renewal of lease in his
  favour himself had no right, title or interest, at the time of exe-:ution of
  sale deed, in respect of the property in question. It is well settled position
  of law that the person having no right, title or interest in the ·1roperty       0
  cannot transfer the same by way of sale deed. Thus, in the inst mt case,
  the sale of the property in question by the original lessee in favt 1r of the
  respondent is not a valid assignment of his right in respect oft'ie same.
  For the aforesaid reasons, the sale deed is not binding on the O')A. The
  High Court has failed to appreciate this important factual and legal aspect
· of the case.                                                                     H
806             SUPREME COURT REPORTS                           [2016] l S.C.R.


A            33. The contention urged by the learned senior counsel for the
      respondent that it has deposited a sum ofRs.96,41,982/- as conversion
      charges of the property in question from leasehold to freehold right of
      the same is also of no relevance and lends no support to the respondent
      for the reason that in the absence ofrenewal oflease of the property by
      the ODA, the original lessee himself becomes an unauthorised occupant
B
      of the property in question. The deposition of conversion charges in
      respect of the same to the office of the DDA cannot help the respondent
      in claiming any right with respect to the property in question. The question
      whether such a procedure in respect of the public property is permissible
      in law or not is not required to be decided in this case. The instant case
c     having peculiar facts and circumstances, namely, after l 0.08.1968 the
      lease stands terminated by effiux of time, which is further evidently
      clear from the termination notice dated 01.09 .1972 and thereafter, the
      original lessee becomes an unauthorised occupant in terms of Section
      2(g) of the Public Premises (Eviction of Unauthorised Occupants) Act,
       1971 and consequently, not entitled to deal with the property in question
D
      in any manner. The very concept of conversion of leasehold rights to
      freehold rights is not applicable to the fact situation.
            Answer to Point no.3
              34. The original lessee has been in unauthorised occupation of
E     the property in question for around 30 years (till he executed a sale deed
      in favour of the respondent) and the respondent has been illegally inducted
      in possession of the same, by the original lessee, who himself was in
      unauthorised possession of the property. For around 17 years the
      respondent has been enjoying the property in question without any right,
      title or interest. Thus, both are liable to pay the damages for unauthorised
 F    occupation and the DDA is empowered under Section 7 of the Public
      Premises (Eviction of Unauthorised Occupants) Act, 1971 to claim
      damages from them. We record this finding in exercise of our appellate
      power in view of our finding and reasons assigned in this judgment holding
      that the concurrent finding is not only erroneous but also suffers from
 G    error in law in granting decree of permanent injunction in favour of the
      respondent who is not entitled in law for the same. There is a miscarriage
      of justice in granting the relief by the courts below in favour of the
      respondent. Further, keeping in view the public interest involved in this
      case and particularly having regard to the peculiar facts and circumstances
      of the case we have to allow this appeal of the DDA. Since we have
 H
    DELHI DEVELOPMENT AUTHORITY v. ANANT RAJ                                    807
      AGENCIES PVT. LTD. [V. GOPALA GOWDA, J.]

answered the points framed in this appeal in favour of the appellant-           A
DDA, we further, direct the DDA to take possession of the property
immediately without resorting to eviction proceedings, as the respondent
has been in unauthorised possession of the property in question, by virtue
of erroneous judgments passed by the courts below. The respondent has
been unlawfully enjoying the public property which would amount to
                                                                                B
unlawful enrichment which is against the public interest.
      35. For the aforesaid reasons this appeal is allowed, the impugned
judgment and decree of the High Court affirming the judgments and
decrees of the First Appellate Court and the Trial Court in RCA No. 75
of 1982 and OS No. 47 of 1975 respectively, is hereby set aside.
Accordingly, We pass the following order-
                                                                                c
       A.    The DDA is allowed to take the possession of the property
             in question immediately and dispose of the same in
             accordance with the provisions of the DD Act read with
             the relevant Rules in favour of an eligible applicant by
             conducting public auction, if it intends to dispose of the         D
             property.
       B.    The DOA is entitled for the recovery of damages from
             both, the original lessee or his legal heirs and the respondent,
             for the period of their unauthorised occupation of the
             property at the market rate prevalent in the area.                 E
       c.    The amount which has been deposited, with the DOA, by
             the respondent as conversion charges is to be adjusted
             towards the damages that may be determined by the DOA
             in accordance with law.
                                                                                F
       D.    The costs of Rs. I lakh is awarded to the DOA, payable by
             the respondent for these proceedings.
Nidhi Jain                                                   ·Appeal allowed.


                                                                                G