Holding

A Letter of Administration does not confer title; the DDA may enforce the lease conditions and demand 50% of the unearned increase in value from the transferee.

Summary

Ram Ohan, an allottee of a plot under the Delhi Development Authority (DDA), died without constructing on the land and left a will in favour of a non‑blood relative, Mrs. Vijaya C. Gurshane. She obtained a Letter of Administration from the District Judge based on the will and applied to the DDA for substitution of her name on the lease. The DDA, invoking its policy to curb illegal transfers to non‑blood relatives, demanded payment of 50% of the unearned increase in the plot's value as stipulated in the perpetual lease deed. The Delhi High Court held that the grant of the Letter of Administration conferred all rights of the deceased on the administrator, dismissing the DDA's demand. On appeal, the Supreme Court held that a Letter of Administration does not confer title and that the DDA may enforce the lease conditions, including the 50% unearned increase, and may inquire into whether the alleged will is in fact a sale. The Court set aside the High Court judgment, ordered the respondent to pay Rs.3,73,745 as the 50% unearned increase, and allowed the appeal. The second appeal concerning a refund of the amount already paid was also allowed, confirming that no refund is due.

Issues considered

Whether the grant of a Letter of Administration confers title to the property and bars the DDA from enforcing lease conditions.
Whether the DDA can demand 50% of the unearned increase in value from a transferee who is not a blood relative under the lease deed and its policy.
Whether the DDA may inquire into the true nature of a transaction (sale disguised as a will) despite the probate of the will.

Legislation cited

Indian Succession Act, 1925

Subjects

SuccessionLetter of AdministrationProbateLease deedUnearned increaseDelhi Development AuthorityNon‑blood relative transferPolicy enforcementTitle dispute

Judgment

A DELHI DEVELOPMENT AUTHORITY
v.
MRS. VIJA YA C. GURSHANEY AND ANR.

AUGUST 26, 2003

B [S.N. VARIA VA AND H.K. SEMA, JJ.]

Succession Act, 1925-Letter ofAdministration--Grant ofby testamentary
Court-Scope of-Held: Grant of letter of administration does not confer title
C to the property but merely enables administration of estate of the deceased-
Further the Testamentary Court is only concerned with the question whether
the testator executed testamentary instrument of his free Will.

Delhi Development Act, 1975-Allottee ofthe plot transferring leasehold
rights in favour of non-blood relative-Grant of Letter of Administration to
D transferee-DDA demanding 50% unearned increase in value of proper'ty in
terms of lease deed-Writ petition by transferee-Dismissal by High Court- f
On appeal held, policy with regard to payment of 50% unearned increase in
value of property is to curb illegal transactions in favour of persons who are
not blood relatives of allottee-Grant of Letter of Administration does not
preclude DDA from enquiring whether Will is actually a sale in the garb of
E Will since testamentary court can find out whether testator executed it of his
free Will-Also transferee not complying with the conditions stipulated in the
lease agreement-Hence DDA competent to charge 50% unearned increase in
value of property.

Allottee of a plot died without making any construction thereon. He
F had transferred the leasehold rights of the plot in favour of respondent a
non-blood relative by virtue of his Will. Respondent applied for grant of
Letter of Administration. District Judge granted the same on the basis of
the Will. Respondent then applied to ODA for substitution of her name
in place of deceased. ODA issued letter to the respondent asking .to pay
G 50% unearned increase in value of property as per the terms and
conditions stipulated in the perpetual lease deed as transfer was not in
favour of blood relative of the allotte.e. It again demanded the payment
stating that non-payment would result in cancellation of the lease.
Respondent then filed a writ petition. High Court held that the moment
the Letter of Administration is granted on basis of the Will, the respondent
H 1010
D.D.A. v. VIJA YA C. GURSHANEY IOI I
is entitled to all the rights the deceased had vested in him at the time of A
his death. Hence the present appeal.

Allowing the appeal, the Court

HELD: 1.1. It is settled law that a Testamentary Court, whilst
granting Probate or Letters of Administration does not even consider B
particularly in uncontested matters, the motive behind execution of a
testamentary instrument. A Testamentary court is only concerned with
finding out whether or not the testator executed the testamentary
instrument of his free will. It is settled law that the grant of a Probate or
Letters of Administration does not confer title to property. They merely C
enable administration of the estate of the deceased. Thus, it is always open
to a person to dispute title even though probate or Letters. of
Administration have been granted. I1017-D-EJ

1.2. DDA is a creature of the Statute and any policy decision or
'
1
guidelines formulated by such authority will have a binding effect on the D
parties, in the absence of rules to the contrary. The rationale behind the
formulation of policies and guidelines issued by DDA is to curb illegal
transactions in favour of persons not of blood relations of the allottee,
being practised rampantly and the property being transferred by an under
hand sale in the grab of Will and power of attorney etc. DDA has E
formulated a policy that in such cases the department would ask for 50%
of unearned increase in the value of property. It is always open to DDA
to inquire whether an alleged Will is in actuality a sale in the garb of Will
in total disregard of the policy decision of the authority, merely because
Probate/Letters of Administration are granted would not preclude DDA
from so inquiring. Thus, the High Court erred in holding that merely F
because Letters of Administration are granted the appellants cannot
inquire into the true nature of the transaction. It must be grasped that
DDA has been given no notice of the testamentary proceedings. Therefore,
it would have no right to appear or oppose such proceedings. 11018-A-CJ

1.3. Clauses 4, 5 and 8 of the lease deed, envisage that the lessee G
\ cannot sell, transfer or part with the possession of the whole or any part
of the commercial plot except with the previous consent of the lessor in
writing, with a rider that the lessor can refuse the transfer. Proviso to
clause 4(b) provides that in the event of sale or foreclosure of the
mortgaged or charged property, the lessor shall be entitled to claim and H
1012 SUPREME COURT REPORTS [2003] SUPP. 2 s.c.R:

A recover 50% of unearned increase in the value of the plot. Further, clause
8 provides that in the event title of lessee in the plot is transferred in any
manner whatsoever the transferor and the transferee shall within three
months of the transfer give notice of such transfer in writing to lessor.
The letters issued to the respondent were in the terms of invoking of
B clauses, 4, 5 and 8 of the lease agreement and policy decision and guidelines
of DDA. The respondent has not complied with any of the conditions
stipulated in the lease agreement and, therefore, it was within the
competence of DDA to invoke the terms and conditions stipulated in the
lease agreement by charging 50% of unearned increase in the value of
the plot. Thus, the order of the High Court is set aside. (1018-D-G]
c CIVIL APPELLATE JURISDICTION : Civil Appeal No. 34 of 1995.

From the Judgment and Order dated 10.5.94 of the Delhi High Court
in C. W.P. No. 3696 of 1992.

D WITH (

C.A.No. 5424 of 1999.

Mukul Rohtagi, Additional Solicitor General and V.B. Sharya for
M/s .. Saharya & Co. for the Appellant.
E P.N. Ramalingam, Nikhil Nayyar, Ms. Lalita Kohli, Anubhay Kumar
for M/s. Manoj Swamp & Co. for the Respondents.

The Judgment of the Court was delivered by

F SEMA, J. These two appeals are being disposed of by a common
judgment. Civil Appeal No. 34 of 1995 has been preferred against the judgment
dated 10.5.1994 passed by the High Court in C.W.P.No. 3696 of 1992 and
Civil Appeal No. 5424 of 1999 is preferred against the order of the National
Consumer Disputes Redressal Commission, New Delhi, dated 1.4.1998 passed
in Revision Petition No. 933of1997. Since the facts of both the appeals are
G identical; we are taking the facts from Civil Appeal No. 34 of 1995.

Shorn of unnecessary details, the facts leading to the filing of the present
appeal arises under the following circumstances: -

One Ram Ohan (since deceased) had purchased a plot No. D-3,
H Community Centre, Narayana, in the public auction held by the Delhi
D.D.A. v. VIJAYA C. GURSHANEY [SEMA, J.] 1013

Development Authority (hereinafter the 'ODA') on 25.5.1969. The perpetual A
lease deed of the plot was executed between Ram Ohan and the President of
India on 17.2.1972. On 18.9.1978, Ram Ohan died without any construction
on the plot. The respondent herein - Mrs.Vijaya C. Gurshaney, seems to have
applied for grant of Letters of Administration to the District Judge, Delhi, on
the strength ofa Will, said to have been executed by Ram Ohan.on 26.10.1977 B
in her favour. It appears that the District Judge granted Letters of
Administration on 7.5.1980. Thereafter, the respondent had applied to DDA
for substitution of her name in place of deceased Ram Ohan. DDA issued
show cause notice for non-construction on plot within the specified time,
which was replied by the respondent by her letter dated 11.12.1982 requesting
DDA for mutation of her name in place of Ram Ohan on the strength of the C
alleged Will, whereupon DDA asked the respondent to produce the relevant
documents for further consideration. DDA by its letter dated 12.8.1985 asked
the respondent to pay 50% of unearned increase as per terms and conditions 0
stipulated in the perpetual lease deed as the transfer was not in favour of
blood relation of Ram Ohan, whereupon the respondent seems to have agreed
to pay 50% of unearned increase to DOA. ODA, thereafter, by its letter dated D
19.6.1992 asked the respondent to pay Rs.6,51,020/- towards 50% of unearned
increase in the value of property. By another letter dated 17.9.1992, DDA
demanded payment of the aforesaid amount failing which would result in
cancellation of the lease. Aggrieved by the aforesaid two letters, the respondent
filed a Writ Petition, inter-alia, for quashing of the aforesaid letters. The E
respondent further sought a direction that the plot be transferred in her name
without payment of any unearned increase and that the mutation be made in
the records of DOA. Alternatively, the respondent prayed that in case the
respondent is liable to pay 50% of unearned increase it should be calcdated
on the basis of the value or the rate of land prevalent as on 13.5.1980 when
the re!tpondent applied for transfer of the leasehold rights of the plot in her F
favour. The High Court, on hearing the parties, came to the conclusion that
since the petitioner (respondent herein) had obtained the Letters of
Administration in accordance with the procedure prescribed under the Indian
Succession Act, 1925, the question as to what considerations prevailed upon
the deceased Ram Ohan to bequeath his plot to the respondent herein is G
irrelevant. The High Court was of the view that the moment the Administrator
grants Letters of Administration on the basis of a Will the respondent is
entitled to all the rights the deceased had vested in him at the time of his
death. The High Court further held that the grant of Letters of Administration
is a judgment in-rem and a conclusive proof of the existence and genuineness
of the Will and its effect cannot be nullified except by proceedings for H
1014 SUPREME COURT REPORTS [2003] SUPP. 2 S.C.R.

A revocation of the Letters of Administration.
Parties are heard at length. Mr. Mukul Rohtagi, learned ASG appeared
on behalf of the appellant. Mr. Nikhil Nayyar, learned counsel appeared on
behalf of the respondent No. I in C.A. No. 34 of 1995 and Mr.P.N.
Ramalingam, learned counsel appeared on behalf of the respondent in C.A.
B 5424 of 1999.

The High Court has not at all adverted to the terms and conditions
stipulated in the perpetual lease deed executed between ODA and the deceased
,. '

- Ram Ohan, on the basis of which two impugned letters in Writ Petition
have been issued. This is where the High· Court had side tracked the main
C issue and. decided an issue, which was not at all relevant in the facts and
circumstances of the case. It was the specific case of the appellant (respondent
before the High Court) that the Will was actuated by monetary consideration
and was in fact a sale. It was also the specific case of the appellant that it was
actually a transfer of land to non-blood relation of the deceased - Ram Ohan
D and was in violation of the terms and conditions stipulated in the lease deed
and therefore, the respondent was liable to pay 50% of unearned increase in
the value of the property.
.....
The High Court although extracted the relevant clauses of terms and
conditions of lease and referred to the policy decision of DDA but the same
E were not at all adverted to while reaching the conclusion. In our view, the
High Court, in its impugned order has not at all adverted to the relevant
issues and decided the case totally based on unfounded grounds.

To appreciate the present controversy in proper perspective Clauses 4,
extracted:
F
"4(a) The Lessee shall not sell, transfer, assign or otherwise part
with the possession of the whole or any part of the commercial plot
except with the previous consent in writing of the Lessor which he
shall be entitled to refuse in his absolute discretion.

G PROVIDED that such consent shall not be given for a period of
ten years from the commencement of this Lease unless, in the opinion
of the Lessor, exceptional circumstances exist for the grant of such
consent.

PROVIDED FURTHER that in the event of the consent being
H given, the Lessor may impose such terms and conditions as he thinks
D.D.A. v. VIJAYA C. GURSHANEY [SEMA, J.) 1015

fit and the Lessor shall be entitled to claim and recover a portion of A
the unearned increase in the value (i.e. the difference between the
premium paid and the market value) of the pfot at the time of sale,
transfer, assignment or parting with the possession, the amount to be
recovered being fifty per cent of the unearned increase and the decision
of the Lessor in respect of the market value shall be final and binding. B
PROVIDED FURTHER that the Lessor shall have the pre-emptive
right to purchase the property after deducting fifty per cent of the
unearned increase as aforesaid.

(b) Notwithstanding anything contained in sub-clause (a) above,
the Lessee may, with the pervious consent in writing of the Chief C
Commissioner of Delhi (hereinafter called "the Chief Commissioner"),
mortgage or charge the plot to such person as may be approved by
the Chief Commissioner in his absolute discretion.

PROVIDED that, in the event of the sale or fore-closure of the
mortgaged or charged property, the Lessor shall be entitled to claim D
and recover the fifty percent of the unearned increase in the value of
the plot as aforesaid and the amount of thP. Lessor's share of the said
unearned increase shall be a first charge, having priority over the said
mortgage or charge. The decision of the Lessor in respect of the
market value of the said plot shall be final and binding on all parties E
concerned.

PROVIDED FURTHER that the Lessor shall have the pre-emptive
right to purchase the mortgaged or charged property after deducting
fifty percent of the unearned increase. as aforesaid.,

(5) The Lessor's right to the recovery of fifty per cent of the unearned F
increase and ·the pre-emptive right to purchase the property as
mentioned hereinbefore shall apply equally to an involuntary sale or
transfer whether it be by or through an executing or insolvency Court.

(8) Whenever the title of Lessee in the plot is transferred in any
manner whatsoever the transferor and the transferee shall, within three G
months of the transfer, give notice of such transfer in writing to the
Lessor.

In the event of the death of the Lessee the person on whom the
title of the deceased devolves shall, within three months of the H
1016 SUPREME COURT REPORTS [2003] SUPP. 2 S.C.R.

A devolution, give notice of such devolution to the Lessor.

The transferee or the person on whom the title devolves, as the
case may be, shall supply the Lessor certified copies of the document(s)
evidencing the transfer or devolution."

B Further, DOA on 26. 7.1988 with the approval of the Lt. Governor of
Delhi formulated a policy and issued guidelines to be followed with regard
to payment of 50% of the unearned increase in the value of the land inter alia
on the basis of the Will left by the deceased allottee. The guidelines are:- '-~

I. In cases where a request is received for transfer of property on
c the basis of 'WILL' to a person outside blood relation who is not
within the definition of 'family member' under the guidelines
issued earlier, the following documents should necessarily be
obtained from the applicant/legatee for the purpose of mutation:
(1) Certified copy of will left by the allottee;
D (2) Death certificate of the allottee;
(3) Affidavit disclosing the particulars of the legal heirs whom the
allottee had survived;
(4) No o_bjection of the legal heirs regarding mutation of the jnterest
of the deceased in fi!'VoUr of the legatee(s);
E
(5) Affidavit from the legatee declaring that the property in question
had not passed on to him during the lifetime of the Testator and
no sale agreement/agreement for construction etc. had been
executed by the Testator in his/her favour, nor any GPA/SPA
had been executed in his favour or in favour of a person nominated
F by him;
(6) Legatee may be asked to produce certified copy of assessment
order of income-tax and house tax receipt showing the name of
the person in whose name the property is being assessed;

G (7) An undertaking from the applicant/legatee to the effect that if at
any stage it is found out that the property had passed on to the
legatee during the lifetime of the Testator then it will be deemed
to be a case of misstatement of facts, misrepresentation or fraud
and the mutation in his/her favour shall stand terminated and the
property shall automatically vest in the Lessor;
H
D.D.A. v. VIJAYA C. GURSHANEY [SEMA, J.] 1017

(8) Indemnity Bond from the legatee duly registered; A
(9) In case the plot/flat was allotted through Co-operative society,
the NOC from the Society;
(10) Original registration Certificate, Fixed Deposit receipt, Challan
form, wherever necessary; and
B
(l l) Such other documents as required to be obtained as per instruction
issued from time to time or procedure laid rlown therefor.

In this case the alleged will is executed on 26th October, 1977. Ram
Ohan died on 18th September, 1978. Letters of Administration were granted
on 7th May, 1980. Admittedly, the respondent is not related to the deceased C
-Ram Ohan. The High Court clearly erred in holding that merely because
Letters of Administration are granted the appellants cannot inquire into the
true nature of the transaction. It is settled law that a Testamentary Court,
whilst granting Probate or Letters of Administrati.on does not even consider
particularly in uncontested matters, the motive behind execution of a
testamentary instrument. A Testamentary court is only concerned with finding D
out whether or not the testator executed the testamentary instrument of his
free will. It is settled law that the grant of a Probate or Letters of Administration
does not confer title to property. They merely enable administration of the
estate of the deceased. Thus, it is always open to a person to dispute title
even though probate or Letters of Administration have been granted. E
DDA is a creature of the Statute. The aims and objects of Delhi
Development Act, 1975 are contained in Section 6 of the Act. It reads:

"6. The objects of the Authority shall be to promote and secure the
development of Delhi according to plan and for that purpose the F
Authority shall have the power to acquire, hold, manage and dispose
of land and other property, to carry out building, engineering, mining
and other operations, to execute work in connection with supply of
water and electricity, disposal of sewage and other services and
amenities and generally to do anything necessary or expedient for
purposes of such development and for purpose incidental thereto: G
Provided that save as provided in this Act, nothing contained in
this Act shall be construed as authorising the disregard by the Authority
of any law for the time being in force."

The rationale behind the formulation of its policies and guidelines issued H
1018 SUPREME COURT REPORTS (2003) SUPP. 2 S.C.R.

A by ODA is to curb illegal transactions in favour of persons not of blood
relations of the allottee, being practiced rampantly and the property being
transferred by an under hand sale in the garb of Will and power of attorney
. etc. ODA has formulated a policy that in such cases the department would
ask for 50% of unearned increase in the value of property. It is always open
to appellants to inquire whether an alleged Will is in actuality a sale in the
B garb of Will in total disregard of the policy decision of the authority. Merely
because Probate/Letters of Administration are granted would not preclude
DDA from so inquiring. It must be grasped that DOA has been given no
notice of the testamentary proceedings. Therefore, it would have no right to
appear or oppose such proceedings. As already said, DOA is a creature of the
C Statute and any policy decision or guidelines formulated by such authority
will have a binding effect on the parties, in absence of rules to the contrary.

Furthermore, clauses 4, 5 and 8 of the lease deed, as extracted, envisage
that the lessee cannot sell, transfer or part with the possession of the whole
or any part of the commercial plot except with the previous consent of the
D lessor in writing, with a rider that the lessor can refuse the transfer. It is also
provided in proviso to clause 4(b) that in the event of sale or foreclosure of
the mortgaged or charged property, the lessor shall be entitled to claim and
recover the 50% of unearned increase in the value of the plot. It is further
proyided in clause 8 that in the event title of lessee in. the plot is transferred
E in any manner whatsoever the transferor and the transferee shall within three
months of the transfer give notice of such transfer in writing to the lessor.
The respondent herein has not complied with any of the conditions stipulated
in the lease agreement and, therefore, it was within the competence of ODA
to invoke the terms and conditions stipulated in the lease agreement by
charging 50% of unearned increase in the value of the plot. The letters dated
F 19.6.1992 and 17.9.1992, impugned in the Writ Petition before the High
Court, were in the tenns of invoking of clauses 4, 5 and 8 of the lease
agreement and policy decision and guidelines of DOA as noticed above. The
impugned judgment and order of the High Court runs contrary to the terms
and conditions stipulated in the lease agreement and the same is unsustainable.
G It is accordingly set aside.

Regarding the quantum of 50% unearned increase to be paid, counsel
on both sides arrived at a consensus that in the facts and circumstances of this
case, the respondent Mrs. Vijaya C.Gurshaney shall pay a sum of Rs.3,73,745/
- to ODA towards the 50% of unearned increase in value of the plot in
H question. Respondent's counsel, on instructions, agreed to pay the entire
D.D.A. v. VJJAYA C. GURSHANEY [SEMA, J.] 1019

amount by 31st December, 2003. We order accordingly. Till the entire amount A
is paid to ODA, the possession of the plot shall not be delivered to the
respondent.

Civil Appeal No. 34 of 1995 is accordingly allowed in the above terms.
The parties are asked to bear their own costs.
B
CIVIL APPEAL NO. 5424 OF 1999

In this appeal the respondent had already paid the unearned increase.
However, as a result of the judgment impugned in C.A. No. 34 of 1995 he
claimed a refund, which was allowed by the District Forum. On appeal by
DOA, State Commission affinned the order of the District Forum and the C
Revision preferred by DOA, before the National Consumer Disputes Redressal
Commission, was also dismissed by the impugned order. As we have set
aside the judgment impugned in C.A. No. 34 of 1995, it follows that the
respondent is not entitled to a refund.

This appeal is accordingly allowed with no order as to costs. D

N.J. Appeal allowed.