New Delhi Municipal Council vs Ganga Devi . on 27 September, 2021


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Supreme Court of India

New Delhi Municipal Council vs Ganga Devi . on 27 September, 2021

Author: Hemant Gupta

Bench: Hemant Gupta, V. Ramasubramanian

                                                                                                 REPORTABLE

                                                 IN THE SUPREME COURT OF INDIA

                                                   CIVIL APPELLATE JURISDICTION


                                                   CIVIL APPEAL NO. 310 OF 2015



                         NEW DELHI MUNICIPAL COUNCIL                                         .....APPELLANT(S)

                                                                           VERSUS

                         GANGA DEVI & ANR.                                                 .....RESPONDENT(S)


                                                                      WITH

                                                   CIVIL APPEAL NO. 311 OF 2015

                                                   CIVIL APPEAL NO. 312 OF 2015

                                                   CIVIL APPEAL NO. 313 OF 2015



                                                             JUDGMENT

HEMANT GUPTA, J.

1. This order shall dispose of four appeals arising out of an order

dated 6.4.2009 passed by the Division Bench of the High Court of

Delhi in the Letters Patent Appeals.

2. Since the facts in all the appeals are similar, for facility of

reference, facts from Civil Appeal No. 310 of 2015 are referred
Signature Not Verified

herein. A show cause notice dated 11.3.2004 was issued to
Digitally signed by R
Natarajan
Date: 2021.09.27
17:10:15 IST
Reason:

respondent no.11 alleging sub-letting and unauthorised

1 Hereinafter referred to as the ‘occupant’

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construction in a stall located at Baba Kharag Singh Marg, New

Delhi on the basis of a survey conducted on 4.3.2004. A reply was

filed that the shop was allotted to Smt. Maheshi Dhoundiyal and

the same was sublet in the year 1999 to the occupant. Smt.

Maheshi Dhoundiyal transferred the shop in favour of the occupant

in the year 2000 and therefore, the occupant claimed ownership of

this property. In addition, the occupant relied upon the Circular

dated 25.7.1996 as well as the policy adopted by the Government

in pursuance of the Cabinet decision dated 31.8.2000 whereby

occupants of the shops in the 14 specified markets were resolved

to be granted ownership rights. Thus, the occupant claimed that

there cannot be discrimination and she should also be treated in

the same category as the occupants in the said 14 markets.

3. After considering the reply filed, an order of eviction was passed by

the Estate Office, Directorate of Estates, New Delhi on 15.12.2005,

ordering eviction of the allottee from whom the occupant had

purchased the stall in question. The appeal against the said

judgment was dismissed by the learned Additional District Judge on

5.12.2006. The said order was challenged by the occupant before

the Writ Court. The learned Single Bench allowed the two writ

petitions holding that merely because market in question i.e., Baba

Kharag Singh Marg Market has fallen into the lap of New Delhi

Municipal Council2 by virtue of notification dated 24.3.2006, it does

not mean that the policy regarding substitution/mutation of

2 For short, the ‘Council’

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ownership for that market can be different from the one adopted

by the Council for all other markets managed by it. Therefore, the

Council cannot treat them differently and the occupant was held to

be entitled to regularization of allotment in accordance with its

policies. The Council was directed to transfer the allotment in the

favour of the occupant within two months. An intra-court appeal

filed by the Council was dismissed on 6.4.2009 vide the impugned

order. Still aggrieved, the Council is in appeal before this Court.

4. The predecessor of the occupant was allotted the site in question

on 4.8.1998. Some of the conditions of the license deed executed

on 11.8.1998 read thus:

“8. The licencee(s) shall not permit the said premises or any
part thereof being used by any other person for any purpose
whatsoever without the previous consent in writing of the
Government and in default thereof shall be liable for
ejectment. The licencee(s) shall not introduce any partner
nor shall he/they transfer possess on of the premises or part
thereof or otherwise carry on the business in the premises
alienate his interest in the premises.

xx xx xx

11. The licencee(s) shall on revocation or termination of this
licence hand over possession of the said premises to the
Government in as good condition as they were in at the date
of the licence, normal wear and tear excepted.

xx xx xx

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

(i) If the licencee(s) being an individual or if a firm, any
partner in the licence firm shall die, or at any time be
adjudicated insolvent or shall have a receiving order or order
for administration of his estate made against him or shall

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take any proceedings for liquidation or composition under
any Insolvency Act, for the time being in force or make any
conveyance or assignment of his effects or enter into any
agreement for composition with his creditors to suspend
payment or shall introduce a new Partner or shall change
the constitution of the partnership or if the firm be dissolved
under the Partnership Act, or

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

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

5. It is an admitted fact that a partnership deed was executed by the

predecessor of occupant on 12.6.2000 with the occupant wherein

the predecessor had kept only 20% share in the partnership firm

and the remaining 80% share was that of the occupant. Such

partnership was dissolved on 3.8.2000, that is within 2 months of

the partnership firm was created. One of the conditions of the

dissolution deed was that the predecessor of the occupant would

have no objection for transfer of the shop 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 and

Municipal Corporation of Delhi w.e.f. 1.4.2006. The said order

reads thus:

“S.O. 404(E). – Whereas the Land and Development Office,
Directorate of Estates and Central Public Works Department
under the Ministry of Urban Development are administering

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various markets in Delhi.

2. And whereas the Central Government has decided to
transfer the markets under Land & Development Office,
Directorate of Estates and Central Public Works Department
(except Indira Chowk, Rajiv Chowk and I.N.A. Market
Complex) comprising of shops and flats over the shops
(excluding the general pool flats over the shops in R.K.
Puram Market, Srinivaspuri, Andrews Ganj, Nanakpura and
Lancer Road Markets) to the New Delhi Municipal Council
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
Council and Municipal Corporation of Delhi will function as
the lessor or Licensor, in respect of shops and flats in these
markets and shall exercise all powers being performed by
Land & Development Office, Directorate of Estates and
Central Public Works Department, as the case may be, as
the lessor or licensor. The guidelines and procedure
followed by Land & Development Office and Directorate of
Estates in the matter of substitution/mutation of 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 of trade, conferment of ownership rights,
recovery of misuse/damages charges etc. may also be
followed by the local bodies viz. New Delhi Municipal Council
and Municipal Corporation of Delhi.

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

5. Both New Delhi Municipal Council and Municipal
Corporation of Delhi shall create a separate Corpus of Fund
to which the revenue generated from the transfer of markets
by way of receipt of rent, licences, unearned increase,
premium, conversion fee, damages/misuse charges etc.
shall be deposited. If for any reason the amount is credited
in the common Municipal Fund, then a separate Account
shall be maintained in respect of the revenue realized from
transfer of markets and this be duly accounted for. These
Funds shall be utilized only for the purpose of development
of the markets and for no other purpose. A quarterly report
of the deposits made and the amount spent are to be
furnished to the Land and Development Office and Ministry

5
of Urban Development, Nirman Bhawan, New Delhi.

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

7.The transfer of Markets will take effect from 1 st April, 2006
and 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

followed by the local bodies. It was argued that the Government of

India on 25.7.1996 allowed regularization of shops, stalls, flats

which had come into occupation of the respective premises on or

before 20.10.1989. Reliance was also placed upon an

advertisement issued by the Government of India published in the

Hindustan Times on 6.8.2001 to confer ownership rights to the

shopkeepers of 12 markets. It was also mentioned that earlier

decision of the Cabinet dated 20.10.1989 which finds 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 of the

market areas covered by the said public notice. The relevant

extract from such public notice reads thus:

“Consequent upon the decision of Cabinet dated 31.8.2000
to grant ownership rights to the shop keepers of 12 markets,
it has been decided by the Ministry that the earlier decision
of the cabinet dated 20.10.1989 shall cease to operate.

Now Director of Estates, Nirman Bhawan, New Delhi on
behalf of the President of India, calls for applications from let
out allottees occupants of the following fourteen markets
who have not been given ownership rights under the cabinet
decision 1989. It has been decided consider their cases for

6
granting ownership rights acceding to the prescribed terms
and conditions as approved by the Cabinet in its decision
dated 31.8.2000.

xx xx xx

2. The following categories of persons would be eligible for
consideration to the grant of ownership rights subject to
production of adequate proofs

(a) Original allottees

(b) The allottees in whose names the shops have been
regularised with the consent of the original allottees
on or before 20.10.1989.

(c) Undisputed occupants after 20.10.1989 till
31.8.2000.”

8. The occupant also relied upon a policy of regularization appended

as Annexure R/3, probably appearing on the website of the Council

and downloaded on 18.12.2006. The relevant clauses read as

under:

“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
license fee at rates fixed by Council from time to time.

xx xx xx

4. Renewal of license of shops/commercial units:
The application for renewal must reach within the time
stipulated as per terms and conditions i.e. 60 days before
the date of expiry of present license. An affidavit is required
that there is no violation of the terms and conditions is of
the present license.

Renewal of license in case of shops, stalls, kiosks, tharas,
office space/units and restaurants may be allowed for a

7
period of ten years on year to year basis subject to
enhancement in license fee @ 10% per annum and as may
be fixed by the council from time to time.

a) Shops/Markets:- Palika Place, Palika Bazaar and Palika
Bhawan’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.”

9. Learned counsel for the occupant also relied upon an interim order

passed by this Court on 30.10.2012 wherein, the policy of

regularization as referred to in the notification dated 24.3.2006 was

asked to be produced by Union of India and the Council. It was

argued that no such policy has been produced on record, therefore,

the occupant is entitled to regularization of the stall site in

accordance with the policy available on the website of the Council.

The occupant had also relied upon communication dated 21.5.2008

by Director (Estates), Council to the Director (Estates), Directorate

of Estates of the Government of India seeking guidance for revision

of prescribed cut-off date i.e., 20.10.1989 for transfer of shops in

the names of the occupants in possession of the premises. In

response thereto, the Director of Estates, Government of India

communicated on 8.7.2008 that all powers to administer the

markets shall now rest with Council/MCD, the concerned local body

i.e., the Council may take appropriate action in this particular case

at their end. It may be mentioned that the letters dated 21.5.2008

and 8.7.2008 are interdepartmental communication and not any

policy decision or circular meant for public. Thus, such

interdepartmental communications are not the enforceable orders

8
of the Union or of the Council.

10. In this factual background, learned counsel for the appellant had

vehemently argued that the license deed executed in the year

1998 had clearly prohibited subletting of premises, including

induction of a partner. The specific reference was made to clauses

8 and 14 of the license deed, as reproduced above. It was also

argued that the notice published on 6.8.2001 would not be

applicable to the stalls located at the Baba Kharag Singh Marg

market and that the administrative decision of the Cabinet dated

20.10.1989 had ceased to operate. The applications were invited

from the allottees/occupants who have not been given ownership

rights in the Cabinet decision in the year 1989 to apply on or before

30.9.2001.

11. The cut-off date for regularization of the shops, stalls, flats was

20.10.1989 as mentioned in the Circular dated 25.7.1996. It is to

be noted that the occupant was not in possession of the stall on or

before 20.10.1989. Still further, the public notice dated 6.8.2001

was in respect of the 14 markets which does not include the market

at Baba Kharag Singh Marg. The said public notice specifically

stipulates that the earlier decision of the Cabinet dated 20.10.1989

shall cease to operate. Therefore, the date fixed in the office order

dated 25.7.1996 ceased to be effective after the Cabinet decision

dated 31.8.2000.

12. There was a clear stipulation in the license deed executed by the

9
predecessor of the occupant that she shall not induct any partner

or sublet the premises. But in utter violation of the terms of the

license, firstly, the partnership was executed and within two

months, it was dissolved. The act of the predecessor of the

occupant and the occupant are clearly and unequivocally in

contravention of the terms of the license deed. Such license deed

was executed after the office order dated 25.7.1996. Further, the

public notice dated 6.8.2001 would not be applicable in respect of

Baba Kharag Singh Marg market.

13. The policy of transfer of allotments of the Council is to be made 60

days before the expiry of the present license. The transfer is also

to be allowed in the cases of partnership, transfer, mutation in

favour of the legal heirs on merits. It is not necessary for us to

examine the applicability of such policy in view of the terms of the

transfer of the markets to the Council.

14. Para 1 of the notification dated 24.3.2006 explains that the Land

and Development Office and Central Public Works Department are

administering various markets in Delhi. In Para 2, the markets were

transferred on “as is where is” basis. In terms of Para 3, the

Council was to function as a lessor or licensee and was to exercise

all powers being performed by Land and Development Office,

Directorate of Estates and Central Public Works Department, as the

case may be. Para 3 further provides that guidelines and

procedures of the Department in matters of substitution/mutation

10
of title, gift permission, sale permission, mortgage permission,

conversion of lease hold into freehold, change of use of premises,

regularization/restoration of allotment of shops may also be

followed by local bodies. Para 5 further contemplates that the

revenue generated from the transfer of markets by way of receipt

of rent, licenses, unearned increase, premium, conversion fee shall

be deposited in a separate corpus of funds and such corpus was to

be utilized only for the purpose of development of the markets and

for no other purpose.

15. Thus, the rights of Government of India in administering the

markets as a lessor or licensee alone was transferred and not the

land or the building thereon. The Council was to administer the

properties as a delegate of the Union. The regularization/restoration

of allotment of shops in 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 restoration of

the Union, the same may be followed by the Council. However, the

policy of the Council, if any, in respect of regularization/restoration

of allotment would not be applicable. Therefore, even if the Council

has not produced policy of regularization, it is not material to the

questions raised in the present appeal. The rights of the Council are

to administer the properties as a delegate of the Government of

11
India and not as an owner as there were no transfer of rights in the

markets in favour of the Council. This is evident from the fact that

the revenue generated from the transfer of markets has to be

deposited in a separate corpus of funds to be utilized only for the

purpose of development of markets and for no other purpose. Such

income would not accrue to the Council as a part of their budget.

16. Therefore, the markets transferred by the Government of India to

the Council have to be dealt independently and separately than the

properties owned by the Council as the Council has no title over

such markets as it has been asked only to manage them on behalf

of the Government of India.

17. Thus, we find that the orders passed by the Division Bench of the

High Court as also the Single Bench of the High Court are erroneous

in law. The same are set aside. The order of eviction affirmed by

the learned Additional District Judge on 5.12.2006 is restored.

However, the occupants are granted time to vacate and hand over

the physical vacant possession of the sites in question on or before

30.11.2021. The appeals are thus allowed.

………………………………………J.

(HEMANT GUPTA)

………………………………………J.

(V. RAMASUBRAMANIAN)

NEW DELHI;

SEPTEMBER 27, 2021.

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