Holding

The auction was for lease‑hold rights at market value and the unearned increase had already been paid by the Income Tax Department, so DDA cannot demand it from the purchaser; the sale deed conveyed only lease‑hold rights, therefore the conversion fee is not refundable and DDA must process the conversion.

Summary

The Delhi Development Authority (DDA) auctioned a lease‑hold residential plot that had been acquired by the Income Tax Department under Section 269UD of the Income Tax Act, which had already paid the unearned increase to DDA. M/s. Karamdeep Finance & Investment (I) Pvt. Ltd. purchased the plot at auction, later applied to convert the lease‑hold rights into free‑hold and deposited conversion charges. DDA demanded additional unearned increase, which the petitioner challenged. The Delhi High Court held that the unearned increase was not payable by the purchaser and that the conversion fee was not refundable, directing DDA to process the conversion. The Supreme Court affirmed that the auction was for lease‑hold rights at market value, the unearned increase had already been satisfied, and the sale deed conveyed only lease‑hold rights, not full free‑hold title, thus denying a refund of conversion charges and ordering DDA to process the conversion application.

Issues considered

Whether the auction purchaser is liable to pay the unearned increase in value of the lease‑hold plot to DDA.
Whether the petitioner is entitled to a refund of the conversion charges deposited for conversion of lease‑hold rights into free‑hold.

Legislation cited

Subjects

leasehold propertyunearned increaseconversion of leasehold to freeholdpublic auctionIncome Tax ActSection 269UDinterpretation of deedsprinciple of mergergovernment grantTransfer of Property Act

Judgment

[2019] 3 S.C.R. 725 725

DELHI DEVELOPMENT AUTHORITY A
v.
M/S. KARAMDEEP FINANCE & INVESTMENT (I) PVT. LTD.
& ORS.
(Civil Appeal No. 1533 of 2019) B
FEBRUARY 12, 2019
[ASHOK BHUSHAN AND K. M. JOSEPH, JJ.]
Transfer of Property:
Leasehold property – Acquired under Chapter XXC of the C
Income Tax Act – Income Tax Department paid amount towards
unearned increase of market value to Delhi Development Authority
(DDA) – Thereafter the property was put to auction, through the
department of Revenue in which respondent was the highest bidder
– Sale deed was executed in favour of the respondent – Thereafter
D
respondent moved application with DDA for conversion of lease-
hold rights in the plots into freehold rights and also deposited amount
towards conversion charges – DDA, thereupon demanded an amount
from the respondent towards unearned increase of market value –
The demand raised by DDA was set aside by Single Judge of High
Court in writ petition and DDA was directed to refund the conversion E
amount – In LPA, High Court set aside the order of Single Judge
and directed DDA to refund the amount towards conversion fee,
while holding that unearned increase was not payable by the
purchaser to DDA – On appeal, held: Since the auction was made
on the market value of the property, there was no question of claim
F
of unearned increase by DDA – Also, since income tax department
had already paid unearned increase, DDA was not entitled to raise
any demand of unearned increase – On interpreting the auction
notice and the sale deed it is clear that what was transferred to the
respondent was leasehold right – Therefore, the respondent is not
entitled for refund of conversion charges – DDA is directed to G
process the respondent’s application for conversion of leasehold
rights into freehold rights – Income Tax Act, 1961 – s. 269 UD.

H
725
726 SUPREME COURT REPORTS [2019] 3 S.C.R.

A Deeds and Documents:
Interpretation of deeds and documents – Held: While
construing documents, intention of the parties have to be
ascertained.
Doctrines/Principles:
B
Principle of merger – Applicability of.
Disposing of C.A. No. 1534 of 2019 and dismissing C.A.
No. 1533 of 2019, the Court
HELD: 1. In the present case, the appropriate authority
C has exercised its power under Section 269UD of the Income Tax
Act for the purchase of the property by the Central Government.
It is by exercise of statutory power that rights of lessee were
purchased by Central Government. Central Government issued
auction notice for auction of property in question. All bids in
D auction of a property are given normally to match the market
price of the property. When the petitioner gave highest bid and
became the successful auction purchaser, the auction purchase
has to be treated on the basis of market value of the property.
When the auction was made on the market value of the property,
there was no question of claim of unearned increase by the DDA.
E On purchase of the property under Section 269UD of the Income
Tax Act, the Income Tax department has already paid unearned
increase to the DDA. Therefore, High Court has rightly held that
DDA was not entitled to raise any demand of unearned increase
from the writ petitioner. [Para 12][736-A-E]
F 2.1 A plain reading of clauses 1 and 2 of the Sale Deed does
give impression that what was sold to the writ petitioner was all
rights, titles, interests and appurtenances but Clause 3 of the
same Sale Deed, gives a different impression. The principles of
construction of documents are well settled. While construing
the documents, intention of the parties have to be ascertained.
G
In cases of ambiguity, several parts of the document have to be
examined to find out what was really intended by the parties. The
auction notice by which the property was put to auction, details
of four properties were given. A perusal of the details of the
properties indicate that property in question was included as Item
H
DDA v. M/S. KARAMDEEP FINANCE & INVESTMENT (I) 727
PVT. LTD.

No. 2, which was mentioned as “This is a lease hold residential A
plot”. So far as properties at Sl. Nos. 1, 2 and 3, the words
mentioned were “leasehold residential plots” whereas with
regard to property details given at Sl. No.4, it was mentioned
that “all rights, titles and interests in the dwelling unit”, which, if
contrasted with details of properties given at Sl. Nos. 1, 2 and 3
B
contains the intendment. Thus, there cannot be any doubt that
property in question, which was put in auction was a property as
leasehold rights residential plots. When property is auctioned,
the terms and conditions of auction are binding on both the parties.
When petitioner submitted his bid in pursuance of the auction
notice, he was bidding for lease-hold residential plot with a double C
storied building. [Paras 15, 16, 17, 18 and 19][740-H; 741-A-C]
Sahebzada Mohammad Kamgarh Shah v. Jagdish
Chandra Deo Dhabal Deb and Others AIR 1960 SC
953 : [1960] SCR 604 – relied on.
2.2 While interpreting the Sale Deed, the auction notice D
has to be looked into to find out the nature of transaction. The
Sale Deed cannot be read divorced to the auction notice or
contrary to auction notice. Auction of a leasehold residential plot
and auction of freehold residential plot carries different
connotations. Leasehold rights are limited rights, which are E
subservient to freehold rights of a property. In giving bid for
leasehold rights and freehold rights, different considerations are
there. Clause 3 indicates that the property sold and transferred
is in terms of the agreement dated 29.09.1988 entered into by
the originl lease holders. Thus, they could best transfer their
right, which was conferred to them by the Indenture dated F
18.03.1970.[Para 19][741-C-E]
2.3 Present is a case of Government grant where
Government has granted rights by Sale Deed to the writ
petitioner. Section 3 of the Government Grants Act, 1895 provides
for Government grants to take effect according to their tenor. G
Paragraph No.3 contains the intention of the granter to transfer
the rights to the writ petitioner in terms of the agreement dated
29.09.1988. Clause 3 limits and explains the rights, which were
given in Clause Nos. 1 and 2 of the Sale Deed, but it cannot be
said that Clause 3 is totally contradictory to Clauses 1 and 2. The H
728 SUPREME COURT REPORTS [2019] 3 S.C.R.

A three clauses have to be harmoniously construed to give effect
to the intention of the granter. Furthermore, auction notice
provided for auction of leasehold rights, which is an important
factor, which cannot be brushed aside while interpreting the Sale
Deed. [Paras 20 and 22] [743-H; 744-E-F]
B 2.4 While finding out the tenor of grant as reflected in Sale
Deed, the provisions of sub-section (1) of Section 269UE of
Income Tax Act, 1961 as amended by Finance Act, 1993 has also
to be taken note of. In sub-section (1) of Section 269UE in place
of words “free from all encumbrances” the words “in terms of
the agreement for transfer referred to in sub-section (1) of Section
C 269UC” have been inserted. When the Sale Deed was executed
in favour of the auction-purchaser above amendment in Section
269UE sub-section (1) had already been inserted. The vesting
of property in Central Government when is in terms of agreement
for transfer referred to in sub-section (1) of Section 269UE at the
D time of execution of Sale Deed, the statutory mandate has been
reflected in Clause 3 of the Sale Deed. Thus, the Court can neither
ignore Clause 3 of the Sale Deed nor can hold that said Clause
has to give way to Clauses 1 and 2 of Sale Deed. Thus, on true
construction of Sale Deed, it is clear that all rights, titles and
interests were not conveyed to the petitioner in the leasehold
E residential plot, when Clauses 1, 2 and 3 are read together. [Paras
24 and 25][745-D-G]
Radha Sundar Dutta v. Mohd. Jahadur Rahim & Ors.
AIR 1959 SC 24 : [1959] SCR 1309; S.N.Ranade
v.Union of India and Another AIR 1964 SC 24 : [1964]
F SCR 885; T. Lakshmipathi and Others v. P. Nithyananda
Reddy and Others (2003) 5 SCC 150 : [2005] 3
SCR 1119; Pramod Kumar Jaiswal and Others v. Bibi
Husn Bano and Others (2005) 5 SCC 492 : [2005] 3
SCR 1119; M/s. Bansal Contractors (India) Ltd. & Anr.
G v. Union of India and Others 76 (1998) DLT 805 –
referred to.
2.5 Present being a case of a Government grant by virtue
of the Section 2 of the Government Grants Act, 1895, nothing in
the Transfer of Property Act, 1882, shall apply or be deemed
H ever to have applied to any grant or other transfer. Issue being
DDA v. M/S. KARAMDEEP FINANCE & INVESTMENT (I) 729
PVT. LTD.

Government grant, the principle of merger may not be of much A
relevance. More so, having construed the Sale Deed as not having
conveyed all rights and interests in the leasehold property, the
principle of merger does not in any manner advance the claim of
the writ petitioner. [Para 27][747-F-H]
2.6 Having held that writ petitioner is not entitled for refund B
of conversion charges, DDA is directed to process the writ
petitioner’s application for conversion of the leasehold rights into
freehold rights. [Para 29][748-E]
Case Law Reference
[1960] SCR 604 relied on Para 16 C

[1959] SCR 1309 referred to Para 19
[1964] SCR 885 referred to Para 21
[2005] 3 SCR 1119 referred to Para 26
D
[2005] 3 SCR 1119 referred to Para 26
76 (1998) DLT 805 referred to Para 28
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1533
of 2019.
From the Judgment and Order dated 30.03.2016 of the High E
Court of Delhi at New Delhi in LPA No. 226 of 2014.
WITH
Civil Appeal No. 1534 of 2019.
Aman Lekhi, K. M. Nataraj, ASGs, Dhruv Mehta, Sr. Adv., F
Ashwani Kumar, Ms. Kumud Lata Das, Jay Kumar, Manish Vashisht,
Sameer Vashisht, Anmol Mehta, Ms. Anupama Dhruve, Ms. Jyoti
Mendiratta, H. Raghavendra Rao, T. M. Singh, Mrs. Anil Katiyar, Advs.
for the appearing parties.
The Judgment of the Court was delivered by G
ASHOK BHUSHAN, J. 1. These two appeals have been filed
against the judgment dated 30.03.2016 of Delhi High Court by which
judgment Delhi High Court has partly allowed the LPA No.226 of 2014
(Delhi Development Authority vs. M/s. Karamdeep Finance and
H
730 SUPREME COURT REPORTS [2019] 3 S.C.R.

A Investment (I) Pvt. Ltd. and Ors.). The Delhi Development Authority
as well as M/s. Karamdeep Finance & Investment (I) Pvt. Ltd., the writ
petitioner have filed these two separate appeals challenging the same
judgment. Both the appeals have been heard together and are being
decided by this common judgment.
B 2. The brief facts of the case necessary for deciding these two
appeals are:
2.1 One Shri Trilochan Singh Rana purchased Plot No.14, Block
A-2, Safdarjung Development Area, New Delhi measuring
725 sq. yards in a public auction by DDA. A Perpetual
C Lease Deed was executed in his favour on 18.03.1970. As
per clause (4)a) of the Perpetual Lease Deed, the lessee
was not entitled to sell, transfer, assign or otherwise part
with the possession of the whole or any part of the plot
except with previous consent in writing of the lessor, that
is, the President of India. In the event of the consent being
D given, the lessor was entitled to impose such terms and
conditions as he deems fit and the lessee was under an
obligation to pay 50% unearned increase of the market value
of the plot (i.e. the difference between the premium paid
and the market value) of the residential plot at the time of
E sale, transfer, assignment, or parting with the possession.
2.2 On 29.09.1988, Shri Trilochan Singh Rana entered into an
agreement to sell the said property to M/s Ocean
Construction Industries Pvt. Ltd. The application in Form
37-I for sale of the said property was filed on 06.10.1988
F under Section 269UD of Income Tax Act, 1961 seeking
NOC from the Appropriate Authority, Income Tax
Department. Later, an order under Section 269UD(1) of
the Income Tax Act, 1961 was passed by the Appropriate
Authority for compulsory acquisition of the property at
Rs.76,00,000/- on 13.12.1988.
G
2.3 Thereafter, the DDA (Finance Member) vide letter dated
12.01.1989 required the Chief Commissioner (Tech.)
Income Tax Department, Central Revenue Building, New
Delhi, to pay an amount towards unearned increase to the
extent of Rs.17,88,114.55. The Chief Commissioner, Income
H
DDA v. M/S. KARAMDEEP FINANCE & INVESTMENT (I) 731
PVT. LTD. [ASHOK BHUSHAN, J.]

Tax Department vide his letter dated 30.01.1989 remitted a A
cheque for Rs.17,86,420/- favouring Delhi Development
Authority towards payment of unearned increase in respect
of said property.
2.4The said property was put to public auction on 20.03.1989
and M/s. Karamdeep Finance & Investment (I) Pvt. Ltd. B
(hereinafter referred to as the “writ petitioner”), the
appellant(writ petitioner) was the highest bidder for an
amount of Rs.1,08,05,000/-. The said bid was accepted by
the Department. The writ petitioner was put in actual
physical possession of the said property on 25.04.1989. On
25.09.1997, a registered Sale Deed was executed in favour C
of the writ petitioner by the President of India through the
Director, Department of Revenue, Ministry of Finance.
2.5 The writ petitioner moved an application with the DDA for
conversion of leasehold rights in the plot into free-hold rights
and also deposited a sum of Rs.3,45,729/- as conversion D
charges with the DDA. On receipt of the application for
conversion, the DDA calculated the 50% amount of
unearned increase of the market value and intimated the
same (i.e. Rs.48,16,853/-) to the auction-purchaser i.e. the
writ petitioner. Thereupon, the DDA by a letter dated E
28.04.2000 raised a demand of Rs.1,43,90,348/-.
2.6 Thereafter, the writ petitioner filed a Writ Petition being
W.P.(C)No.4152 of 2000 before Delhi High Court. The
learned Single Judge vide its order dated 26.09.2013 had
allowed the writ petition and the demand of Rs.1,43,90,348/ F
- raised by the DDA vide demand letter dated 28.04.2000
was set aside being illegal and also directed the DDA to
return the amount of Rs.3,45,729/-, which had been
deposited by the writ petitioner towards the conversion
charges with interest.
G
2.7 Thereafter, the DDA filed a Letters Patent Appeal i.e.
LPA No.226 of 2014 before the Delhi High Court against
the judgment and order dated 26.09.2013 passed by the
learned Single Judge in W.P.(C)NO.4152 of 2000.

H
732 SUPREME COURT REPORTS [2019] 3 S.C.R.

A 2.8 The Delhi High Court passed the impugned judgment
and final order dated 30.03.2016 in LPA No.226 of 2014
vide which the direction of learned Single Judge in
W.P.(C)No.4152 of 2000 to refund the amount of
conversion fee paid by the writ petitioner has been set aside
and partly allowed the appeal of the appellant-DDA and
B
also held that the unearned increase is not payable by the
purchaser to the DDA. Both the parties being aggrieved
by the judgment of the Division Bench has filed these
appeals.
3. We have heard Shri Aman Lekhi, learned Addl. Solicitor General
C for the DDA. Shri Dhruv Mehta, learned senior counsel has appeared
for M/s. Karamdeep Finance & Investment (I) Pvt. Ltd. We have also
heard learned counsel for the Union of India.
4. Shri Aman Lekhi, learned Addl. Solicitor General submits that
both the learned Single Judge and Division Bench erred in setting aside
D the demand raised by the DDA of unearned increase. It is submitted
that admittedly the property in question was leasehold property leased
out to Shri Trilochan Singh Rana. The interest of Shri Trilochan Singh
Rana was acquired under Chapter XXC of the Income Tax Act, 1961.
In the auction notice which was issued by the competent authority, the
E leasehold rights of the property were sought to be put for auction. The
writ petitioner could not have purchased in auction anything more than
the leasehold rights. The depositing of conversion charges by the writ
petitioner itself indicates that the understanding was that they have
purchased in auction only the leasehold rights. The view of the High
Court that the unearned increase is liable to be paid only in case of
F voluntary transfer is erroneous. The liability to pay unearned increase is
fasten on all transfers. The writ petitioner being the highest bidder of the
auction was liable to pay unearned increase. The value of the property
having substantially increased the unearned increase ought to have been
paid and both the Single Judge and the Division Bench erred in setting
G aside the demand of unearned increase.
5. Shri Dhruv Mehta, learned senior counsel appearing for the
writ petitioner refuting the submissions made by the learned counsel for
the appellant-DDA supported the judgment of the High Court in so far
as it held that there is no liability to pay unearned increase on the auction-
H purchaser. He submits that there was no condition in the auction notice
DDA v. M/S. KARAMDEEP FINANCE & INVESTMENT (I) 733
PVT. LTD. [ASHOK BHUSHAN, J.]

that unearned increase is to be paid by the auction-purchaser. More so A
unearned increase was paid by the Income Tax Department earlier which
has been noticed in the conveyance deed itself, unearned increase having
been paid when the Income Tax Department acquired the property there
was no occasion to make any further payment by auction-purchaser. In
support of the appeal filed by the writ petitioner, Shri Mehta submits that
B
what was conveyed to the auction-purchaser is not a leasehold right but
absolute right to the property. The auction-purchaser having become
absolute owner of the property, there was no occasion to pay any
conversion charge. It is submitted that it was under some mis-conception
that the writ petitioner had deposited the conversion charges under some
bona fide mistake. Hence, they filed a writ petition for refund of the C
conversion charges which were deposited by them under bona fide
mistake. He submits that competent authority having acquired the right
of the property under Chapter XXC of the Income Tax Act, the leasehold
rights are also vested in the Government. There is merger of leasehold
rights in the lessor, the Government. The lesser right having been merged
D
in the higher right, the principle of merger becomes applicable. What
was sold to the writ petitioner was absolute right. The lease came to end
when Income Tax Department purchased the property.
6. Shri Mehta further referring to the Sale Deed executed in favour
of the writ petitioner, submits that Clause 1 and Clause 2 of the Sale
Deed clearly vest absolute right to the aforesaid property in favour of E
the vendee. He further submits that Clause 3 of the Sale Deed which
refers to terms of agreement for transfer dated 29.09.1988 between
transferor and M/s. Ocean Construction Industries is not compatible
with Clauses 1 and 2 and hence has to give way to the Clauses 1 and 2.
He submits that Sale Deed read as a whole clearly indicates that what F
was sold was absolute right.
7. Shri Aman Lekhi making his submission in rejoinder contends
that condition of the auction of the property under which the writ petitioner
was declared the highest bidder itself mentions that what was proposed
to be sold was leasehold rights. He has referred to auction notice and G
submits that mention of leasehold rights with regard to present property
in question and mention of an absolute right with regard to certain other
properties clearly indicates that in the auction notice what was proposed
to be transferred was leasehold rights of the property in question. He
further submits that the principle of merger is inapplicable since necessary
H
734 SUPREME COURT REPORTS [2019] 3 S.C.R.

A conditions of merger are not fulfilled in the present case. The Income
Tax Department which acquired the property was not in the capacity of
lessor, hence, the condition is not fulfilled. He submits that conveyance
deed in favour of writ petitioner has to be construed as a whole. The
document cannot be construed in part. He submits that Clause 11 and
some other Clauses mention “ground rent” etc. which indicates that
B
there is no question of absolute sale. The property is never vested in the
writ petitioner, the depositing of conversion charges itself indicated that
the writ petitioner is aware of what he purchased is only leasehold rights.
The Division Bench has rightly held that writ petitioner is liable to pay
conversion charges.
C 8. Learned counsel for the parties have relied on various judgments
of this Court and Delhi High Court which shall be referred to while
considering the submissions in detail.
9. From the pleadings of the parties and submissions made before
us, following are the two issues, which arises for consideration:-
D
(i) Whether writ petitioner was liable to pay unearned increase in
value of the property to the DDA?
(ii) Whether writ petitioner was entitled to get refund of conversion
charges deposited by it?
E Issue No.1
10. In Perpetual Lease, granted to Shri Trilochan Singh Rana and
Mrs. Rani Rana, one of the conditions provided that lessor may impose
conditions to claim and recover a portion of the unearned increase in the
value (i.e. the difference between the premium paid and the market
F value) of the residential plot at the time of sale, transfer, assignment or
parting with the possession, the amount to be recovered being fifty
percent of the unearned increase. The relevant clause (4)(a) of the
Perpetual Lease is as follows:-
“(4)(a) The Lessee shall not sell, transfer assign or otherwise
G part with the possession of the whole or any part of the residential
plot except with the previous consent in writing of the Lessor
which he shall be entitled to refuse in his absolute direction.
Provided that such consent shall not be given for a period of ten
years, from the commencement of the Lease unless, in the opinion
H
DDA v. M/S. KARAMDEEP FINANCE & INVESTMENT (I) 735
PVT. LTD. [ASHOK BHUSHAN, J.]

of the Lessor, exceptional circumstances exist for the grant of A
such consent.
Provided further that in the event of the consent being given, the
Lessor may impose such terms and conditions as he thinks fit and
the Lessor shall be entitled to claim and recover a portion of the
unearned increase in the value (i.e. the difference between the B
premium paid and the market value) of the residential plot at the
time of sale, transfer, assignment or parting with the possession,
the amount to be recovered being fifty percent of the unearned
increase and the decision of the Lessor in respect of the market
value shall be final binding.”
C
11. We have already noticed above that original lessee Trilochan
Singh Rana entered into agreement of sale with M/s. Ocean Construction
Industries Pvt. Ltd. dated 29.09.1988 to transfer the rights for a
consideration of Rs.76,00,000/-. Exercising power under Section 269UD
of Income Tax Act, 1961, appropriate authority passed a purchase order
dated 13.12.1988 of the property in question. After the aforesaid purchase D
order an amount of Rs.17,86,240/- towards payment of unearned increase
was paid to the DDA by Income Tax Department. After the aforesaid
purchase order, auction notice dated 20.03.1989 was issued giving details
of the properties, which included the property in question. In pursuance
of the auction notice, the writ petitioner gave highest bid and was declared E
auction purchaser for an amount of Rs.1,08,05,000/-. The writ petitioner
paid the full amount and was delivered the possession on 25.04.1989.
Sale Deed was also executed in favour of writ petitioner on 25.09.1997.
The petitioner made an application to the DDA for grant of freehold
rights and also deposited amount of Rs.3,45,729/-. While processing the
application for conversion of leasehold rights to free hold rights, DDA F
made a demand of Rs.1,43,90,348/- towards unearned increase, which
was challenged by the writ petitioner. Whether the writ petitioner was
liable to pay unearned increase payment is the question to be answered.
12. We have already noticed the clause (4)(a) of the Perpetual
Lease Deed dated 18.03.1970, which provided that in event sanction is G
given by lessor to the lessee for sale, transfer or assignment, lessor shall
be entitled to claim and recover a portion of the unearned increase in the
value. The unearned increase being the difference between the premium
paid and the market value. The object behind the said clause was that a
lessee when is permitted to transfer the leasehold rights, the lessor should H
736 SUPREME COURT REPORTS [2019] 3 S.C.R.

A not be deprived of the difference between the premium paid and the
market value. The clause was inserted in the Perpetual Lease to
compensate the lessor. The present is not a case where lessee is making
any transfer or seeking any permission from the lessor to give his consent.
In the present case, the appropriate authority has exercised its power
under Section 269UD of the Income Tax Act for the purchase of the
B
property by the Central Government. It is by exercise of statutory power
that rights of lessee were purchased by Central Government. Central
Government issued auction notice for auction of property in question.
All bids in auction of a property are given normally to match the market
price of the property. When the petitioner gave highest bid and became
C the successful auction purchaser, the auction purchase has to be treated
on the basis of market value of the property. Clause (4)(a) of Perpetual
Lease as noted above provided for payment of unearned increase to
cover up the difference between premium paid and the market value.
When the auction was made on the market value of the property, we are
of the view that there was no question of claim of unearned increase by
D
the DDA. We further noticed that on purchase of the property under
Section 269UD of the Income Tax Act, the Income Tax department has
already paid unearned increase to the DDA. We, thus, are of the view
that High Court has rightly held that DDA was not entitled to raise any
demand of unearned increase from the writ petitioner. We, thus, do not
E find any merit in the appeal filed by the DDA, which deserves to be
dismissed.
Issue No.2
13. The submission, which has been much pressed by learned
counsel for the writ petitioner is that, what was sold to writ petitioner by
F Sale Deed dated 25.09.1997 was absolute rights with all rights and
interests in the property. The sale in favour of writ petitioner was not
sale of leasehold rights rather it was for all rights, title and interests,
hence writ petitioner acquired freehold rights. It is submitted that
application for conversion of leasehold rights into freehold rights and
G deposit of the amount on the said application by writ petitioner was under
bonafide mistake. He submits that in the writ petition, the petitioner has
alternatively prayed for refund of the amount paid for conversion.
14. Learned counsel for the petitioner has relied on Clauses 1 and
2 of the Sale Deed, which are to the following effect:-
H
DDA v. M/S. KARAMDEEP FINANCE & INVESTMENT (I) 737
PVT. LTD. [ASHOK BHUSHAN, J.]

“1. That in pursuance of the said auction and consideration of the A
sum of Rs. 1,08,05,000/- (Rs. One Crore Eight Lakh and Five
Thousand only) already paid by the Vendor/Auction Purchaser to
the Vendor as aforesaid, the receipt of which the Vendor hereby
acknowledged, the Vendor hereby transfers, conveys and sells to
the Auction Purchaser, the Vendee, by way of sale of that plot of
B
land measuring 725 sq. yds. bearing No. 14 in Block A-2 in the
lay out plan of Safdarjung Development Scheme, Ring Road, South
Delhi (Villages Mohammadpur Munirka and Humayunpur
Revenue Estate, together with all rights, titles, interests,
appurtenances, easements, privileges in and pertaining to the
aforesaid property in favour of the Vendee absolutely and forever, C
with the provisions of Section 269UE(1) of the Income Tax Act,
1961 and all the powers rights and interests vested in the Vendor
with regard to the sale, transfer and conveyances of the aforesaid
property to the Vendee hereto.
2. That on the execution of this sale deed, the Vendee has become D
the absolute and exclusive owner of the property hereby sold,
conveyed and transferred to it and that the Vendee shall have
absolute rights and title to the same and to deal with the property
in any manner it likes. It is made clear that the Vendor has no
right and is left with no……………interest, claim or title of any
nature whatsoever into on upon the aforesaid property.” E

15. A plain reading of the above clauses does give impression that
what was sold to the writ petitioner was all rights, titles, interests and
appurtenances but when we read Clause 3 of the same Sale Deed, the
said clause gives a different impression. Clause 3 of the Sale Deed is as
follows:- F

“3. That the Vendor hereby represents and assures to the Vendee
that his right in the property hereby sold, transferred and conveyed
is in terms of agreement for transfer dated 29-9-1988 between
Mr. Trilochan Singh Rana and Mis, Rani Rana transferor and M/
s. Ocean Construction Industries Pvt. Ltd. (through its Director G
Shri Jugal Kishore Malhan) transferee.”
16. The principles of construction of documents are well settled.
While construing the documents/intention of the parties have to be
ascertained. In this context, reference is made to judgment of this Court
H
738 SUPREME COURT REPORTS [2019] 3 S.C.R.

A in Sahebzada Mohammad Kamgarh Shah Vs. Jagdish Chandra Deo
Dhabal Deb and Others, AIR 1960 SC 953. In Paragraph Nos. 12
and 13, following was laid down:-
“12. In his attempt to establish that by this later lease the lessor
granted a lease even of these minerals which had been excluded
B specifically by Clause 16 of the earlier lease, Mr Jha has arrayed
in his aid several well established principles of construction. The
first of these is that the intention of the parties to a document of
grant must be ascertained first and foremost from the words used
in the disposition clause, understanding the words used in their
strict, natural grammatical sense and that once the intention can
C be clearly understood from the words in the disposition clause
thus interpreted it is no business of the courts to examine what
the parties may have said in other portions of the document. Next
it is urged that if it does appear that the later clauses of the
document purport to restrict or cut down in any way the effect of
D the earlier clause disposing of property the earlier clause must
prevail. Thirdly it is said that if there be any ambiguity in the
disposition clause taken by itself, the benefit of that ambiguity
must be given to the grantee, the rule being that all documents of
grants must be interpreted strictly as against the grantor. Lastly it
was urged that where the operative portion of the document can
E be interpreted without the aid of the preamble, the preamble ought
not and must not be looked into.
13. The correctness of these principles is too well established by
authorities to justify any detailed discussion. The task being to
ascertain the intention of the parties, the cases have laid down
F that that intention has to be gathered by the words used by the
parties themselves. In doing so the parties must be presumed to
have used the words in their strict grammatical sense. If and when
the parties have first expressed themselves in one way and then
go on saying something, which is irreconcilable with what has
gone before, the courts have evolved the principle on the theory
G that what once had been granted cannot next be taken away, that
the clear disposition by an earlier clause will not be allowed to be
cut down by a later clause. Where there is ambiguity it is the duty
of the Court to look at all the parts of the document to ascertain
what was really intended by the parties. But even here the rule
H has to be borne in mind that the document being the grantor’s
DDA v. M/S. KARAMDEEP FINANCE & INVESTMENT (I) 739
PVT. LTD. [ASHOK BHUSHAN, J.]

document it has to be interpreted strictly against him and in favour A
of the grantee.”
17. This Court further in Paragraph No.14 has held that in cases
of ambiguity, several parts of the document have to be examined to find
out what was really intended by the parties. In Paragraph No. 14,
following was laid down:- B
“14. …………………………………In cases of ambiguity it is
necessary and proper that the court whose task is to construe the
document should examine the several parts of the document in
order to ascertain what was really intended by the parties. In this
much assistance can be derived from the fourth condition of the C
conditions which were imposed by the lease as regards the grant
of sub-leases. This condition provided inter alia that all such under-
leases to be granted by the lessee shall be subject to the provisions
of Clause 16 of the principal lease ……
…………………………………”
D
18. Before we construe the document, we need to first notice the
auction notice by which the property was put to auction. Auction notice,
which has been brought on the record as Annexure-R1 indicate that
details of four properties were given in the auction notice. It is useful to
look into the details given as follows:-
D e t a ils o f P r o p e r t ie s R e se r v e P r ic e E
1. P r o p e rt y No. B -6, F r ie n d s 3 4 . 2 0 l ac s
C o lon y M a th u r a R oa d , N e w
D e lhi .
T h is is a le a se h o ld r e sid e n tia l
p l o t m e a s u r i n g 1 9 5 .0 9 7 s q . M t .
t o g e t h er w i th b uild in g s an d
s t r u ct u r e t h e r e o n a n d fi x t u r e s a n d F
f ittin g th e r e in
2. P r o p e rt y N o . 1 4 , B l o c k A - 2 , 1.0 8 c r ore s
S a f d a r j u n g D e v el o p m e n t A r e a ,
N e w D e lh i .
T h is is a le a s e h o l d r e sid e n tia l
p l o t m e a s u r i n g (7 2 5 s q . y d s . ) w i t h
a d o u b l e s t o r e y e d b u i ld i n g . T h e G
G r o u n d F l o o r c o n s i s t s o f d ra w i n g
d i n i n g b e d r o o m , k i t ch e n a n d a
g a r a g e . T h e F ir s t F l o o r c o n s i s t s o f
3 b e d r o o m s , 3 b a t h ro o m s , s t o re
a n d a l o b b y o v e r t h e g ar a g e .
T h e r e a r e 2 flo o r s e ac h h av in g a
s e r v a n t r o o m W . O . a n d a co c k i n g
ve r a nd a h. H
740 SUPREME COURT REPORTS [2019] 3 S.C.R.

A 3. P ro p e r t y N o . A - 8 /2 3 , V as a n t 36 .60 L a c s
V i h a r, N e w D e l h i .
T h is is a l ea s e h o ld r e s id e n t ia l
p lo t N . 2 3 in S tr e e t N o . A - 8 in
t h e la y o u t p la n o f V as a n t
V iha r of th e G o ve rnm e n t
S e rv a n t s C o o p e ra t i v e . H o u s e
B u il d in g S o c ie ty L td . , a n d
B m e a s u ri n g 15 0 Sq. yd s
a l o n g w i t h t h e s u p e r s t r u c t u re
b u i l d t h e r e o n . ( C o v e r e d a re a
1 3 5 0 S q . F t ).
4. P r o p e r t y b e a ri n g H o u s e N o . E - 2 5 . 6 0 l ac s
4 4 4 ( G r o u n d F lo o r ) , G r e a ter
K a i l a s h P a r t -I I , N e w D e l h i -
C 1 10 04 8.
A l l r i g h t s , t i t l e s a n d In t e r e s t s
i n t h e d w e l l i n g u n i t o n g ro u n d
f l o o r, a n d m a z a n i n e f l o o r o f
H o us e N o. E -44 4, G r e a ter
K a i l a s h , P a r t - II , N e w D e l h i ,
t o g et h e r w ith u n d iv id e d .
D I n d iv is i b le an d im p a r tib le
o w n e r s h ip r i g h t o f 3 5 % in th e
l a n d u n d e r n e a th o f th e s a id
b u ild in g an d in c lu d in g th e
f o llo w in g s :-
1. O ne d r a w i n g -c u m -
d in in g h a ll, th r e e b e d
E ro o m s w i t h a t t a c h e d b a t h
ro o m s , b a l c o n y , k i t c h e n ,
s t o ra g e s p a c e ( s e r v a n t s
Q u a r t e rs ) a n d s e r v an t's
b a t h r o o m s o n g ro u n d
fl o o r .

F 2 . F r on t la w n a n d b a c k
c o u rt y a rd o n t h e g ro u n d
fl o o r .

P a rk i n g spa c e for a
M ar u ti C ar in th e
D r i v e w a y.
G In g r e s s a n d E g r e s s f ro m
th e m a in g a te to th e
d w e llin g u n it .
19. A perusal of the details of the properties indicate that property
in question is included as Item No. 2, which is mentioned as “This is a
lease hold residential plot”. It is to be noticed that in so far as properties
H
DDA v. M/S. KARAMDEEP FINANCE & INVESTMENT (I) 741
PVT. LTD. [ASHOK BHUSHAN, J.]

at Sl. Nos. 1, 2 and 3, the words mentioned are “leasehold residential A
plots” whereas with regard to property details given at Sl. No.4, it has
been mentioned that “all rights, titles and interests in the dwelling unit”,
which, if contrasted with details of properties given at Sl. Nos. 1, 2 and
3 contains the intendment. Thus, there cannot be any doubt that property
in question, which was put in auction was a property as lease hold rights
B
residential plots. When property is auctioned, the terms and conditions
of auction are binding on both the parties. When petitioner submitted his
bid in pursuance of the auction notice, he was bidding for lease hold
residential plot with a double storied building. While interpreting the
Sale Deed, the auction notice has to be looked into to find out the nature
of transaction. The Sale Deed cannot be read divorced to the auction C
notice or contrary to auction notice. Auction of a leasehold residential
plot and auction of freehold residential plot carries different connotations.
Leasehold rights are limited rights, which are subservient to freehold
rights of a property. In giving bid for leasehold rights and freehold rights,
different considerations are there. Clause 3 as noted above indicate
D
that the property sold and transferred is in terms of the agreement dated
29.09.1988 between Trilochan Singh Rana and Mrs. Rani Rana to M/s.
Ocean Construction Industries Pvt. Ltd. Trilochan Singh Rana and Mrs.
Rani Rana were only lease holders. Thus, they could best transfer their
right, which was conferred to them by the Indenture dated 18.03.1970.
Learned counsel for the writ petitioner has submitted that Clause 3 being E
clearly contradictory to Clauses 1 and 2 has to give way to earlier clauses
in the Sale Deed. He has placed reliance on judgment of this Court in
Radha Sundar Dutta Vs. Mohd. Jahadur Rahim & Ors., AIR 1959
SC 24. In Paragraph Nos. 11 and 13, following was laid down:-
“11. Now, it is a settled rule of interpretation that if there be F
admissible two constructions of a document, one of which will
give effect to all the clauses therein while the other will render
one or more of them nugatory, it is the former that should be
adopted on the principle expressed in the maxim “ut res magis
valeat quam pereat”. What has to be considered therefore is
whether it is possible to give effect to the clause in question, which G
can only be by construing Exhibit B as creating a separate Patni,
and at the same time reconcile the last two clauses with that
construction. Taking first the provision that if there be other persons
entitled to the Patni of lot Ahiyapur they are to have the same
H
742 SUPREME COURT REPORTS [2019] 3 S.C.R.

A rights in the land comprised in Exhibit B, that no doubt posits the
continuance in those persons of the title under the original Patni.
But the true purpose of this clause is, in our opinion, not so much
to declare the rights of those other persons which rest on statutory
recognition, but to provide that the grantees under the document
should take subject to those rights. That that is the purpose of the
B
clause is clear from the provision for indemnity which is contained
therein. Moreover, if on an interpretation of the other clauses in
the grant, the correct conclusion to come to is that it creates a
new Patni in favour of the grantees thereunder, it is difficult to
see how the reservation of the rights of the other Patnidars of lot
C Ahiyapur, should such there be, affects that conclusion. We are
unable to see anything in the clause under discussion, which
militates against the conclusion that Exhibit B creates a new Patni.
13. We must now refer to the decision on which the learned Judges
in the Court below have relied in support of their conclusion. In
D Kanchan Barani Debi v. Umesh Chandra, AIR 1925 Cal. 807,
the facts were that the Maharaja of Burdwan had created a Patni
of lot Kooly in 1820. The Choukidari Chakran lands situated
within that village were resumed under the Act and transferred to
the Zamindar who granted them in 1899 to one Syamlal Chatterjee
in Patni on terms similar to those in Exhibit B. In 1914 the Patni
E lot Kooly was sold under the Regulation, and purchased by Smt
Kanchan Barani Debi. She then sued as such purchaser to recover
possession of the Choukidari Chakran lands. The defendants
who represented the grantees under the Patni settlement of 1899
resisted the suit on the ground that the sale of Patni Kooly did not
F operate to vest in the purchaser the title in the Choukidari
Chakran lands, as they formed a distinct Patni. Dealing with this
contention, B.B. Ghose, J. who delivered the judgment of the Court,
observed:
“It is certainly open to the only two parties concerned to alter
G the terms of the original patni if they chose to do so; and what
we have to see is whether that was done. In order to do that,
we have to examine the terms of the pattah by which the
Choukidari Chakran lands were granted to Syamlal Chatterjee.”
The learned Judge then refers to the two clauses corresponding
H to the last two clauses in Exhibit B, and comes to the conclusion
DDA v. M/S. KARAMDEEP FINANCE & INVESTMENT (I) 743
PVT. LTD. [ASHOK BHUSHAN, J.]

that their effect was merely to, restore the position as it was when A
the original Patni was created, and that, in consequence, the
purchaser was entitled to the Patni as it was created in 1820, and
that the plaintiff was entitled to the possession of the Choukidari
Chakran lands as being part of the Patni. Now, it is to be observed
that in deciding that the Choukidari Chakran lands granted in
B
1899 became merged is lot Kooly, as it was in 1820, the learned
Judge did not consider the effect of the clause providing for sale
of those lands as a distinct entity under the provisions of the
Regulation when there was default in the payment of rent payable
thereon under the deed, and that, in our opinion, deprives the
decision of much of its value. In the result, we are unable to hold C
that the two clauses on which the learned Judges base their
conclusion are really inconsistent with the earlier clauses which
support the view that the grant under Exhibit B is of a distinct
Patni. Nor do we agree with them that the earlier clause providing
for the sale of the Chaukidari Chakran lands in default of the
D
payment of jama, should be construed so as not to override the
later clauses. If, in fact, there is a conflict between the earlier
clause and the later clauses and it is not possible to give effect to
all of them, then the rule of construction is well established that it
is the earlier clause that must override the later clauses and not
vice versa. In Forbes v. Git, (19220 1 AC 256, Lord Wrenbury E
stated the rule in the following terms:
“If in a deed an earlier clause is followed by a later clause
which destroys altogether the obligation created by the earlier
clause, the later clause is to be rejected as repugnant and the
earlier clause prevails. In this case the two clauses cannot be F
reconciled and the earlier provision in the deed prevails over
the later.”
We accordingly hold that Exhibit B created a new Patni and that
the sale of the lands comprised therein is not bad as of a portion
of a Patni.” G
20. There cannot be any dispute to principles of construction of
document as laid down by this Court as noticed above. But we have to
look into the different clauses to find out the real intention of the granter.
We need to notice that present is a case of Government grant where
Government has granted rights by Sale Deed to the writ petitioner. H
744 SUPREME COURT REPORTS [2019] 3 S.C.R.

A Section 3 of the Government Grants Act, 1895 provides for Government
grants to take effect according to their tenor. Section 3 is as follows:-
3. Government grants to take effect according to their
tenor.- All provisions, restrictions, conditions and limitations over
contained in any such grant or transfer as aforesaid shall be valid
B and the effect according to their tenor, any rule of law, statute or
enactment of the Legislature to the contrary notwithstanding.
21. This Court in S.N. Ranade Vs. Union of India and Another,
AIR 1964 SC 24 while considering the case of Inam laid down
following:-
C “……………………when the said Government made a grant to
the appellant’s predecessors, the principle enunciated by Section
8 of the Transfer of property Act should be applied and the grant
should be construed to include all rights, title and interest of the
grantor, unless there is a contrary provision either expressly made,
D or implied by necessary implications.”
22. Normally, the grant should be construed to include all rights,
title and interest of the grantor, unless there is a contrary provision either
expressly made, or implied by necessary implications, is the principle,
which has been laid down by this Court in above case. Paragraph No.3
E contains the intention of the granter to transfer the rights to the writ
petitioner in terms of the agreement dated 29.09.1988. Clause 3 limits
and explain the rights, which were given in Clause Nos. 1 and 2 of the
Sale Deed, but it cannot be said that Clause 3 is totally contradictory to
Clauses 1 and 2. The three clauses have to be harmoniously construed
to give effect to the intention of the granter. Furthermore, as we have
F noticed that auction notice provided for auction of leasehold rights, which
is an important factor, which cannot be brushed aside while interpreting
the Sale Deed.
23. With reference to Clause 3 in the Sale Deed a statutory
provision also needs to be noticed. Section 269UE of the Income Tax
G Act, 1961 deals with vesting of property in Central Government. Section
269UE has been amended by Finance Act, 1993 w.e.f. 17.11.1992.
Amended Section 269UE sub-section (1) is as follows:
“269UE. Vesting of property in Central Government.—(1)
Where an order under sub-section (1) of section 269UD is made
H
DDA v. M/S. KARAMDEEP FINANCE & INVESTMENT (I) 745
PVT. LTD. [ASHOK BHUSHAN, J.]

by the appropriate authority in respect of an immovable property A
referred to in sub-clause (i) of clause (d) of section 269UA, such
property shall, on the date of such order, vest in the Central
Government in terms of the agreement for transfer referred to in
sub-section (1) of section 269UC:
Provided that where the appropriate authority, after giving an B
opportunity of being heard to the transferor, the transferee or other
persons interested in the said property, under sub-section (1A) of
section 269UD, is of the opinion that any encumbrance on the
property or leasehold interest specified in the aforesaid agreement
for transfer is so specified with a view to defeat the provisions of
this Chapter, it may, by order, declare such encumbrance or C
leasehold interest to be void and thereupon the aforesaid property
shall vest in the Central Government free from such encumbrance
or leasehold interest.
(2) *** *** ***
D
“
24. In sub-section (1) of Section 269UE in place of words “free
from all encumbrances” the words “in terms of the agreement for transfer
referred to in sub-section (1) of Section 269UC” have been inserted.
When the Sale Deed was executed in favour of the auction-purchaser E
above amendment in Section 269UE sub-section (1) had already been
inserted. The vesting of property in Central Government when is in terms
of agreement for transfer referred to in sub-section (1) of Section 269UE
at the time of execution of Sale Deed, the statutory mandate has been
reflected in Clause 3. We, thus, neither can ignore Clause 3 of the Sale
Deed nor can hold that said Clause has to give way to Clauses 1 and 2 F
of Sale Deed. While finding out the tenor of grant as reflected in Sale
Deed, the provisions of sub-section (1) of Section 269UE as amended
by Finance Act has also to be taken note of.
25. We, thus, find that on true construction of Sale Deed, it is
clear that all rights, titles and interests were not conveyed to the petitioner G
in the leasehold residential plot, when we read Clauses 1, 2 and 3 together.
26. Learned counsel for the writ petitioner relying on provisions
of Section 111 of the Transfer of Property Act, 1882 contends that
leasehold rights have been merged in the lessor since when lessor’s
H
746 SUPREME COURT REPORTS [2019] 3 S.C.R.

A interest coalesces with lessee’s interest, the principle of merger comes
into play. He has placed reliance on judgment of this Court in T.
Lakshmipathi and Others Vs. P. Nithyananda Reddy and Others,
(2003) 5 SCC 150 and Pramod Kumar Jaiswal and Others Vs.
Bibi Husn Bano and Others, (2005) 5 SCC 492. This Court in T.
Lakshmipathi (supra) had examined the doctrine of merger as
B
contained in Section 111(d). In Paragraph Nos. 14 to 17, following was
laid down:-
“14. The common-law doctrine of merger is statutorily embodied
in the Transfer of Property Act, 1882. Section 111(d) provides:
C “111. Determination of lease.—A lease of immovable
property, determines—
* * *
(d) in case the interests of the lessee and the lessor in the
whole of the property become vested at the same time in one
D person in the same right;
* * *”
A bare reading of the doctrine of merger, as statutorily recognized
in India, contemplates (i) coalescence of the interest of the lessee
and the interest of the lessor, (ii) in the whole of the property, (iii)
E
at the same time, (iv) in one person, and (v) in the same right.
There must be a complete union of the whole interests of the
lessor and the lessee so as to enable the lesser interest of the
lessee sinking into the larger interest of the lessor in the reversion.
15. In Badri Narain Jha v. Rameshwar Dayal Singh, AIR 1951
F
SC 186, it was held by this Court that if the lessor purchases the
lessee’s interest, the lease no doubt is extinguished as the same
man cannot at the same time be both a landlord and a tenant, but
there is no extinction of the lease if one of the several lessees
purchased only a part of the lessor’s interest. In such a case the
G leasehold and the reversion cannot be said to coincide.
16. In Sk. Faqir Bakhsh v. Murli Dhar, AIR 1931 PC 63, the
plaintiff was holding on lease a portion of the entire property.
Subsequently, the plaintiff and the defendant became pro indiviso
joint proprietors of the property by purchasing shares from the
H
DDA v. M/S. KARAMDEEP FINANCE & INVESTMENT (I) 747
PVT. LTD. [ASHOK BHUSHAN, J.]

earlier owners. The lease was subsisting when the shares were A
bought by the parties. In a suit for accounts filed by the plaintiff it
was held that the plaintiff’s rights under lease of a part do not
merge in his rights as joint proprietor of the whole of the property
as between the parties the plaintiff held a valid and subsisting
lease.
B
17. A Division Bench of the Patna High Court in Parmeshwar
Singh v. Sureba Kuer, AIR 1925 Pat 530, held that Section
111(d) applies only to a case where the interests of the lessee and
of the lessor in the whole of the property become vested at the
same time in one person in the same right. Where a co-proprietor
in the property purchased for himself the interest of the lessees of C
the whole property, there could be no merger. On purchase of a
partial interest in tenancy rights by the owner, the onus of proving
that the distinction between the interests continued to be kept
alive subsequently also cannot be placed on the party alleging that
the distinction was so kept alive. To the same effect is the view of D
the law taken in Lala Nathuni Prasad v. Syed Anwar Karim,
AIR 1919 Pat 390. Merger is largely a question of intention,
dependent on circumstances, and the courts will presume against
it when it operates to the disadvantage of a party, as was held by
this Court in Nalakath Sainuddin v. Koorikadan Sulaiman,
(2002) 6 SCC 1 (SCC para 20).” E

27. To the same effect is judgment of this Court in Pramod Kumar
Jaiswal (supra). There cannot be any dispute to the proposition laid
down by this Court in reference to Section 111(d). We, however, find
that in the present case, we need not rely on doctrine of merger as
contained in Section 111(d). Present being a case of a Government F
grant by virtue of the Section 2 of the Government Grants Act, 1895,
nothing in the Transfer of Property Act, 1882, shall apply or be deemed
ever to have applied to any grant or other transfer. The principles
contained in the Transfer of Property Act have been applied while
construing the Government grants as has been noticed above. But herein G
issue being Government grant, the principle of merger may not be of
much relevance. More so, we having construed the Sale Deed as not
having conveyed all rights and interests in the leasehold property, the
principle of merger does not in any manner advance the claim of the
writ petitioner.
H
748 SUPREME COURT REPORTS [2019] 3 S.C.R.

A 28. Learned counsel for the writ petitioner has also referred to
and relied on judgment of the Division Bench of Delhi High Court in M/
s. Bansal Contractors (India) Ltd. & Anr. Vs. Union of India and
Others, 76 (1998) DLT 805. In the above case, sale of property was
made in public auction after exercising the power under Section 269UD.
From the judgment of Delhi High Court, it is not clear that as to whether
B
any clause similar to Clause 3 as contained in the Sale Deed in question,
was there. In absence of any such clause, interpretation put to the Sale
Deed by the Delhi High Court cannot be faulted. It is further relevant to
notice that details of the auction notice are not noticed in the judgment to
find out what was the nature of the property, which was sought to be put
C for auction. We, thus, are of the view that judgment of Delhi High Court
was on its own facts and cannot be relied on by the writ petitioner in the
facts of the present case. We, thus, do not find any error in the judgment
of the Division Bench setting aside the direction made by the learned
Single Judge to refund the amount of conversion. The writ petitioner
has made an alternative prayer in the writ petition seeking a writ of
D
mandamus directing the respondents to allow/order the conversion of
the lease hold rights into freehold rights in respect of the aforesaid plot
of land without payment of any amount of alleged unearned increase
and or interest due thereon.
29. We having held that writ petitioner is not entitled for refund of
E conversion charges, we direct the DDA to process the writ petitioner’s
application for conversion of the leasehold rights into freehold rights.
The Civil Appeal No.1534 of 2019 filed by M/s. Karamdeep Finance
and Investment (I) Pvt. Ltd. is disposed of upholding the order of Division
Bench, however, with direction to DDA to process the application for
F conversion in accordance with law. The Civil Appeal No. 1533 of 2019
is dismissed. The parties shall bear their own costs.

Kalpana K. Tripathy Appeals disposed of.

G

H