NEW DELHI MUNICIPAL COUNCIL versus GANGA DEVI & ANR. on 27 September 2021

SUPREME COURT REPORTS

[2021] 9 S.C.R.

NEW DELHI MUNICIPAL COUNCIL

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v.

GANGA DEVI & ANR.

(Civil Appeal No. 310 of 2015)

BSEPTEMBER 27, 2021

[HEMANT GUPTA AND V. RAMASUBRAMANIAN, JJ.]

Eviction – Predecessor of the occupant-respondent no.1 wasallotted the site in question in 1998 by license deed – Shoptransferred in favour of occupant – Show cause notice issuedCalleging sub-letting and unauthorized construction – Eviction orderpassed ordering eviction of the allotee – Appeal dismissed –Challenged by occupant – Writ petitions allowed – Writ appeal byNew Delhi Municipal Council – Dismissed – Held: Cut-off date forregularization of the shops, stalls, flats was 20.10.89 as mentionedDin the Circular dated 25.07.96, relied on by occupant – Occupantwas not in possession of the stall on or before 20.10.89 – Further,public notice dated 06.08.2001 conferring ownership rights to theshopkeepers was in respect of the 14 markets which does not includethe market in question – It specifically stipulated that the earlierdecision of the Cabinet dtd. 20.10.89 shall cease to operate –ETherefore, the date fixed in the office order dated 25.07.96 ceasedto be effective after the Cabinet decision dated 31.08.2000 –Moreover, the partnership deed executed by predecessor of theoccupant with the occupant was in contravention of the terms ofthe license deed which prohibited subletting/induction of partner –FSuch license deed was executed after the office order dated 25.07.96– Orders passed by Division Bench and Single Bench of the HighCourt set aside – Eviction order restored.

Allowing the appeals, the Court

HELD: 1. The cut-off date for regularization of the shops,Gstalls, flats was 20.10.1989 as mentioned in the Circular dated25.7.1996. It is to be noted that the occupant was not in possessionof the stall on or before 20.10.1989. Still further, the public noticedated 6.8.2001 was in respect of the 14 markets which does notinclude the market at Baba Kharag Singh Marg. The said publicHnotice specifically stipulates that the earlier decision of the

Cabinet dated 20.10.1989 shall cease to operate. Therefore, thedate fixed in the office order dated 25.7.1996 ceased to be effectiveafter the Cabinet decision dated 31.8.2000. There was a clearstipulation in the license deed executed by the predecessor ofthe occupant that she shall not induct any partner or sublet thepremises. But in utter violation of the terms of the license, firstly,the partnership was executed and within two months, it wasdissolved. The act of the predecessor of the occupant and theoccupant are clearly and unequivocally in contravention of theterms of the license deed. Such license deed was executed afterthe office order dated 25.7.1996. Further, the public notice dated6.8.2001 would not be applicable in respect of Baba Kharag SinghMarg market. [Paras 11, 12][236-G-H; 237-A-C]

2. The rights of Government of India in administering themarkets as a lessor or licensee alone was transferred and not theland or the building thereon. The Council was to administer theproperties as a delegate of the Union. The regularization/restoration of allotment of shops in para 3 was in terms of thepolicy of the Union and not that of Council. The relevant clauseis “the guidelines and procedure followed by Land & DevelopmentOffice and Directorate of Estates in the matter of….regularization/restoration of allotment of shops may also be followed”. Thus, ifthere is a policy of regularization or restoration of the Union, thesame may be followed by the Council. However, the policy of theCouncil, if any, in respect of regularization/restoration of allotmentwould not be applicable. Therefore, even if the Council has notproduced policy of regularization, it is not material to the questionsraised in the present appeal. The rights of the Council are toadminister the properties as a delegate of the Government ofIndia and not as an owner as there were no transfer of rights inthe markets in favour of the Council. This is evident from the factthat the revenue generated from the transfer of markets has tobe deposited in a separate corpus of funds to be utilized only forthe purpose of development of markets and for no other purpose.Such income would not accrue to the Council as a part of theirbudget. Therefore, the markets transferred by the Governmentof India to the Council have to be dealt independently andseparately than the properties owned by the Council as the Councilhas no title over such markets as it has been asked only to manage AB

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Athem on behalf of the Government of India. The orders passedby the Division Bench of the High Court as also the Single Benchof the High Court are erroneous in law. The same are set aside.The order of eviction affirmed by the Additional District Judgeon 5.12.2006 is restored. [Paras 15-17][237-G-H; 238-A-F]

BCIVIL APPELLATE JURISDICTION: Civil Appeal No.310 of2015.

From the Judgment and Order dated 06.04.2009 of the High Courtof Delhi at New Delhi in LPA No.145 of 2009.

WithC

Civil Appeal Nos.311, 312 and 313 of 2015.

Yoginder Handoo, Ashwin Kataria, Advs. for the Appellant.

Sanjay Jain, ASG, A. K. Sinha, Sr. Adv., S. R. Rajagopal,S. Santanam Swaminadhan, Ms. Abhilasha Shrawat, Ms. Aarthi Rajan,DRajesh Kumar Singh, Ms. Sunita Sharma, Ms. Reena Pandey, AmrishKumar, B. V. Balaram Das, Advs. for the Respondents.

The Judgment of the Court was delivered by HEMANT GUPTA, J.

E1. This order shall dispose of four appeals arising out of an orderdated 6.4.2009 passed by the Division Bench of the High Court of Delhiin the Letters Patent Appeals.

2. Since the facts in all the appeals are similar, for facility ofreference, facts from Civil Appeal No. 310 of 2015 are referred herein.FA show cause notice dated 11.3.2004 was issued to respondent no.1[1]alleging sub-letting and unauthorised construction in a stall located atBaba Kharag Singh Marg, New Delhi on the basis of a survey conductedon 4.3.2004. A reply was filed that the shop was allotted to Smt. MaheshiDhoundiyal and the same was sublet in the year 1999 to the occupant.Smt. Maheshi Dhoundiyal transferred the shop in favour of the occupantGin the year 2000 and therefore, the occupant claimed ownership of thisproperty. In addition, the occupant relied upon the Circular dated25.7.1996 as well as the policy adopted by the Government in pursuanceof the Cabinet decision dated 31.8.2000 whereby occupants of the shops H1 Hereinafter referred to as the ‘occupant’

in the 14 specified markets were resolved to be granted ownership rights.Thus, the occupant claimed that there cannot be discrimination and sheshould also be treated in the same category as the occupants in the said14 markets.

3. After considering the reply filed, an order of eviction was passedby the Estate Office, Directorate of Estates, New Delhi on 15.12.2005,ordering eviction of the allottee from whom the occupant had purchasedthe stall in question. The appeal against the said judgment was dismissedby the learned Additional District Judge on 5.12.2006. The said orderwas challenged by the occupant before the Writ Court. The learnedSingle Bench allowed the two writ petitions holding that merely becausemarket in question i.e., Baba Kharag Singh Marg Market has fallen intothe lap of New Delhi Municipal Council[2] by virtue of notification dated24.3.2006, it does not mean that the policy regarding substitution/mutationof ownership for that market can be different from the one adopted bythe Council for all other markets managed by it. Therefore, the Councilcannot treat them differently and the occupant was held to be entitled toregularization of allotment in accordance with its policies. The Councilwas directed to transfer the allotment in the favour of the occupantwithin two months. An intra-court appeal filed by the Council wasdismissed on 6.4.2009 vide the impugned order. Still aggrieved, the Councilis in appeal before this Court.

4. The predecessor of the occupant was allotted the site in questionon 4.8.1998. Some of the conditions of the license deed executed on11.8.1998 read thus:

“8. The licencee(s) shall not permit the said premises or any partthereof being used by any other person for any purpose whatsoeverwithout the previous consent in writing of the Government and indefault thereof shall be liable for ejectment. The licencee(s) shallnot introduce any partner nor shall he/they transfer possess on ofthe premises or part thereof or otherwise carry on the business inthe premises alienate his interest in the premises.

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11. The licencee(s) shall on revocation or termination of this licencehand over possession of the said premises to the Government in A

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as good condition as they were in at the date of the licence, normalwear and tear excepted.

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14. This licence shall stand ipso-facto determined, without anyright to compensation whatsoever to the licencee(s), in any of theBfollowing events, that is to say:-

(i) If the licencee(s) being an individual or if a firm, any partner inthe licence firm shall die, or at any time be adjudicated insolventor shall have a receiving order or order for administration of hisestate made against him or shall take any proceedings forCliquidation or composition under any Insolvency Act, for the timebeing in force or make any conveyance or assignment of his effectsor enter into any agreement for composition with his creditors tosuspend payment or shall introduce a new Partner or shall changethe constitution of the partnership or if the firm be dissolved underDthe Partnership Act, or

(ii) If the licencee(s) being a company shall pass a resolution orthe court shall make an order for the liquidation or its affairs or areceiver or manager on behalf of the debenture holders shall beappointed or circumstances shall have arosen which entitle theEcourt or debenture holders to appoint a receiver or manager.

Provided always that such determination shall not prejudiceany right of action or remedy which shall have accrued or shallaccrue thereafter to the Government.”

5. It is an admitted fact that a partnership deed was executed byFthe predecessor of occupant on 12.6.2000 with the occupant whereinthe predecessor had kept only 20% share in the partnership firm and theremaining 80% share was that of the occupant. Such partnership wasdissolved on 3.8.2000, that is within 2 months of the partnership firmwas created. One of the conditions of the dissolution deed was that thepredecessor of the occupant would have no objection for transfer of theGshop in favour of the occupant and regularization in her name.

6. It was on 24.3.2006, the Ministry of Urban Development,Government of India transferred certain markets to the Council andMunicipal Corporation of Delhi w.e.f. 1.4.2006. The said order readsthus:

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“S.O. 404(E). – Whereas the Land and Development Office,Directorate of Estates and Central Public Works Departmentunder the Ministry of Urban Development are administeringvarious markets in Delhi.

2. And whereas the Central Government has decided to transferthe markets under Land & Development Office, Directorate ofEstates and Central Public Works Department (except IndiraChowk, Rajiv Chowk and I.N.A. Market Complex) comprisingof shops and flats over the shops (excluding the general pool flatsover the shops in R.K. Puram Market, Srinivaspuri, Andrews Ganj,Nanakpura and Lancer Road Markets) to the New Delhi MunicipalCouncil and Municipal Corporation of Delhi on “as is where is”basis, it is decided as follows;

3. On transfer of these markets, New Delhi Municipal Counciland Municipal Corporation of Delhi will function as the lessor orLicensor, in respect of shops and flats in these markets and shallexercise all powers being performed by Land & DevelopmentOffice, Directorate of Estates and Central Public WorksDepartment, as the case may be, as the lessor or licensor. Theguidelines and procedure followed by Land & Development Officeand Directorate of Estates in the matter of substitution/mutationof title, Gift Permission, Sale Permission, Mortgage Permission,Conversion of lease hold into freehold, change of use of premises,regularization/restoration of allotment of shops etc., change oftrade, conferment of ownership rights, recovery of misuse/damages charges etc. may also be followed by the local bodiesviz. New Delhi Municipal Council and Municipal Corporation ofDelhi.

4. In addition to performing the functions as lessor/licensor, localbodies can also take appropriate action against violation of buildingbye-laws, municipal bye-laws and exercise other statutory powers.

5. Both New Delhi Municipal Council and Municipal Corporationof Delhi shall create a separate Corpus of Fund to which therevenue generated from the transfer of markets by way of receiptof rent, licences, unearned increase, premium, conversion fee,damages/misuse charges etc. shall be deposited. If for any reasonthe amount is credited in the common Municipal Fund, then a A

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Aseparate Account shall be maintained in respect of the revenuerealized from transfer of markets and this be duly accounted for.These Funds shall be utilized only for the purpose of developmentof the markets and for no other purpose. A quarterly report of thedeposits made and the amount spent are to be furnished to theLand and Development Office and Ministry of UrbanBDevelopment, Nirman Bhawan, New Delhi.

6. The details of the markets being transferred to the New DelhiMunicipal Council are listed under Annexure-I. Similarly, the detailsof the markets being transferred to the Municipal Corporation ofDelhi are at Annexure-II.C

7. The transfer of Markets will take effect from 1[st] April, 2006and transfer of all records shall be completed by 30[th] April, 2006.”

7. The argument of the occupant was that in terms of clause 3,the policy of regularization/restoration of allotment may also be followedDby the local bodies. It was argued that the Government of India on25.7.1996 allowed regularization of shops, stalls, flats which had comeinto occupation of the respective premises on or before 20.10.1989.Reliance was also placed upon an advertisement issued by theGovernment of India published in the Hindustan Times on 6.8.2001 toconfer ownership rights to the shopkeepers of 12 markets. It was alsoEmentioned that earlier decision of the Cabinet dated 20.10.1989 whichfinds mention in the office order dated 25.7.1996 will cease to operate.It may be mentioned that Baba Kharag Singh Marg Market is not one ofthe market areas covered by the said public notice. The relevant extractfrom such public notice reads thus:

F“Consequent upon the decision of Cabinet dated 31.8.2000 to grantownership rights to the shop keepers of 12 markets, it has beendecided by the Ministry that the earlier decision of the cabinetdated 20.10.1989 shall cease to operate. Now Director of Estates,Nirman Bhawan, New Delhi on behalf of the President of India,Gcalls for applications from let out allottees occupants of thefollowing fourteen markets who have not been given ownershiprights under the cabinet decision 1989. It has been decided considertheir cases for granting ownership rights acceding to the prescribedterms and conditions as approved by the Cabinet in its decisiondated 31.8.2000.

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2. The following categories of persons would be eligible forconsideration to the grant of ownership rights subject to productionof adequate proofs (a) Original allottees (b) The allottees in whose names the shops have been regularisedwith the consent of the original allottees on or before20.10.1989.

(c) Undisputed occupants after 20.10.1989 till 31.8.2000.”

8. The occupant also relied upon a policy of regularizationappended as Annexure R/3, probably appearing on the website of theCouncil and downloaded on 18.12.2006. The relevant clauses read asunder:

“TRANSFER OF ALLOTMENTS

Transfer of allotment is made as per policies/resolutions of NDMC.

Transfer is allowed in following cases on merits:

1. Partnership:

Partnership or subletting is allowed after enhancement of licensefee at rates fixed by Council from time to time.

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4. Renewal of license of shops/commercial units:

The application for renewal must reach within the time stipulatedas per terms and conditions i.e. 60 days before the date of expiryof present license. An affidavit is required that there is no violationof the terms and conditions is of the present license.

Renewal of license in case of shops, stalls, kiosks, tharas, officespace/units and restaurants may be allowed for a period of tenyears on year to year basis subject to enhancement in license fee@ 10% per annum and as may be fixed by the council from timeto time.

a) Shops/Markets:- Palika Place, Palika Bazaar and PalikaBhawan’s license fee freezed w.e.f. 1-9-2000 to 1-9-2007.

b) Non-renewal of license in time will attract damage charged @30% of the license fee.”

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A9. Learned counsel for the occupant also relied upon an interimorder passed by this Court on 30.10.2012 wherein, the policy ofregularization as referred to in the notification dated 24.3.2006 was askedto be produced by Union of India and the Council. It was argued that nosuch policy has been produced on record, therefore, the occupant isentitled to regularization of the stall site in accordance with the policyBavailable on the website of the Council. The occupant had also reliedupon communication dated 21.5.2008 by Director (Estates), Council tothe Director (Estates), Directorate of Estates of the Government ofIndia seeking guidance for revision of prescribed cut-off date i.e.,20.10.1989 for transfer of shops in the names of the occupants inCpossession of the premises. In response thereto, the Director of Estates,Government of India communicated on 8.7.2008 that all powers toadminister the markets shall now rest with Council/MCD, the concernedlocal body i.e., the Council may take appropriate action in this particularcase at their end. It may be mentioned that the letters dated 21.5.2008and 8.7.2008 are interdepartmental communication and not any policyDdecision or circular meant for public. Thus, such interdepartmentalcommunications are not the enforceable orders of the Union or of theCouncil.

10. In this factual background, learned counsel for the appellanthad vehemently argued that the license deed executed in the year 1998Ehad clearly prohibited subletting of premises, including induction of apartner. The specific reference was made to clauses 8 and 14 of thelicense deed, as reproduced above. It was also argued that the noticepublished on 6.8.2001 would not be applicable to the stalls located at theBaba Kharag Singh Marg market and that the administrative decision ofFthe Cabinet dated 20.10.1989 had ceased to operate. The applicationswere invited from the allottees/occupants who have not been givenownership rights in the Cabinet decision in the year 1989 to apply on orbefore 30.9.2001.

11. The cut-off date for regularization of the shops, stalls, flatsGwas 20.10.1989 as mentioned in the Circular dated 25.7.1996. It is to benoted that the occupant was not in possession of the stall on or before20.10.1989. Still further, the public notice dated 6.8.2001 was in respectof the 14 markets which does not include the market at Baba KharagSingh Marg. The said public notice specifically stipulates that the earlierdecision of the Cabinet dated 20.10.1989 shall cease to operate.H

Therefore, the date fixed in the office order dated 25.7.1996 ceased tobe effective after the Cabinet decision dated 31.8.2000.

12. There was a clear stipulation in the license deed executed bythe predecessor of the occupant that she shall not induct any partner orsublet the premises. But in utter violation of the terms of the license,firstly, the partnership was executed and within two months, it wasdissolved. The act of the predecessor of the occupant and the occupantare clearly and unequivocally in contravention of the terms of the licensedeed. Such license deed was executed after the office order dated25.7.1996. Further, the public notice dated 6.8.2001 would not beapplicable in respect of Baba Kharag Singh Marg market.

13. The policy of transfer of allotments of the Council is to bemade 60 days before the expiry of the present license. The transfer isalso to be allowed in the cases of partnership, transfer, mutation in favourof the legal heirs on merits. It is not necessary for us to examine theapplicability of such policy in view of the terms of the transfer of themarkets to the Council.

14. Para 1 of the notification dated 24.3.2006 explains that theLand and Development Office and Central Public Works Departmentare administering various markets in Delhi. In Para 2, the marketswere transferred on “as is where is” basis. In terms of Para 3, theCouncil was to function as a lessor or licensee and was to exercise allpowers being performed by Land and Development Office, Directorateof Estates and Central Public Works Department, as the case may be.Para 3 further provides that guidelines and procedures of the Departmentin matters of substitution/mutation of title, gift permission, sale permission,mortgage permission, conversion of lease hold into freehold, change ofuse of premises, regularization/restoration of allotment of shops mayalso be followed by local bodies. Para 5 further contemplates that therevenue generated from the transfer of markets by way of receipt ofrent, licenses, unearned increase, premium, conversion fee shall bedeposited in a separate corpus of funds and such corpus was to beutilized only for the purpose of development of the markets and for noother purpose.

15. Thus, the rights of Government of India in administering themarkets as a lessor or licensee alone was transferred and not the land orthe building thereon. The Council was to administer the properties as a AB

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Adelegate of the Union. The regularization/restoration of allotment of shopsin para 3 was in terms of the policy of the Union and not that of Council.The relevant clause is “the guidelines and procedure followed by Land& Development Office and Directorate of Estates in the matter of…………………. regularization/restoration of allotment of shops may also be followed”. Thus, if there is a policy of regularization or restorationBof the Union, the same may be followed by the Council. However, thepolicy of the Council, if any, in respect of regularization/restoration ofallotment would not be applicable. Therefore, even if the Council hasnot produced policy of regularization, it is not material to the questionsraised in the present appeal. The rights of the Council are to administerCthe properties as a delegate of the Government of India and not as anowner as there were no transfer of rights in the markets in favour of theCouncil. This is evident from the fact that the revenue generated fromthe transfer of markets has to be deposited in a separate corpus of fundsto be utilized only for the purpose of development of markets and for noother purpose. Such income would not accrue to the Council as a part ofDtheir budget.

16. Therefore, the markets transferred by the Government of Indiato the Council have to be dealt independently and separately than theproperties owned by the Council as the Council has no title over suchmarkets as it has been asked only to manage them on behalf of theEGovernment of India.

17. Thus, we find that the orders passed by the Division Bench ofthe High Court as also the Single Bench of the High Court are erroneousin law. The same are set aside. The order of eviction affirmed by thelearned Additional District Judge on 5.12.2006 is restored. However, theFoccupants are granted time to vacate and hand over the physical vacantpossession of the sites in question on or before 30.11.2021. The appealsare thus allowed.

GDivya Pandey

Appeals allowed.

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