NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY (NOIDA)versusARMY WELFARE HOUSING ORGANIZATION & ORS.

                     [2010] 12 S.C.R. 1


 NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY                    A
                   (NOIDA)
                              v.
   ARMY WELFARE HOUSING ORGANIZATION & ORS.
          (Civil Appeal No. 3625 of 2006)
                                                               B
                   SEPTEMBER 10, 2010

 [DALVEER BHANDARI AND HARJIT SINGH. BEDI, JJ.]

     Transfer of Property:
                                                               c
     Transfer of land cum super-structure - Land allotted by
NO/DA to respondent-societies pursuant to execution of lease
deed - Super-structure built on the land - Notices issued by
NO/DA directing individual members of the housing societies
to execute tripartite deeds with the housing societies, as the D
lessee, and NO/DA, as the lessor, for sale of the super-
structure - Propriety of - Held: Proper - The impugned
notices postulating the execution of tripartite deeds flow not
only from the clauses of the lease deed but also from the
supervisory authority placed on NO/DA by virtue of the
provisions of s. 7 of the Act - Transfer of the land cum super- E
structure would be by way of a sub-lease from the lessor i.e.
NO/DA to the lessee (respondents-housing societies) to the
sub-lessees who are the individual al/ottees, by way of a
stamped and registered document - Uttar Pradesh Industrial
Development Act, 1976 - ss. 7 and 14.                           F

     Registration Act, 1908- ss.17(1)(d) and 49 - Transfer of
Property Act, 1882 - s. 107 - Payment of stamp duty on lease
- Lease deed I sub-lease of immovable property - Held: Is
compulsorily registerable u/s.17(1)(d) of the Registration Act G
ands. 107 of the Transfer of Property Act - In absence of such
a document, s. 49 of the Registration Act visualizes no legal
effect or an effective transfer by way of a lease or sub-lease.

                             1                                 H
    2      SUPREME COURT REPORTS            [2010] 12 S.C.R.


A      Land was allotted by New Okhla Industrial
  Development Area (NOIDA) to respondents-housing
  societies pursuant to execution of a lease deed by and
  between them. The respondents-housing societies filed
  writ petition challenging the letters/notices by which
B NOIDA had directed the individual members of the
  housing societies to execute tripartite deeds, the other
  two parties being the Housing Societies, as the lessee,
  and NOIDA, as the lessor, for sale of the super-structure
  built on the land allotted by NOIDA to these Societies, and
c for further restraining the State Government, NOIDA etc.
  from charging any stamp duty on the execution of the
  deeds.

       The respondents pleaded that the super-structure on
  the land allotted by NOIDA had been built solely on the
D contributions made by the individual members; that the
  Societies being the lessees of the land in question were
  not the owners of the super-structure so as to bind the
  individual members to the covenants that had been
  subscribed to by the Societies with NOIDA the lessor and
E further that NOIDA had not contributed anything towards
  the cost of construction of the super-structures.

       The writ petition was allowed by the High Court
  primarily on the ground that the lease. deed referred only
F to the transfer of the land and there was no reference
  whatsoever that the building constructed thereon at a
  later stage would also be treated to have been demised
  by the lessor; that the allottee members, as owners of the
  flats/apartments, built from the contributions made by
G them could not be compelled to purchase it from the
  society and that such a transfer will be fictitious and
  involuntary, and thus a void transaction under the Indian
  Contract Act. Accordingly, the High Court set aside the
  impugned notices issued by NOIDA directing the

H
        N.0.1.D.A. v. ARMY WELFARE HOUSING                 3
                      ORGANIZATION
respondents to enter into the tripartite deeds and              A
restrained NOIDA from compelling the respondents to
execute the tripartite sale deed of super structure of flat
and sub lease deed of land, and from requiring payment
of any stamp duty and registration fees on such
documents.                                                      B

     Allowing the appeals and dismissing the connected
writ petitions, the Court

      HELD:1.1. The lease deed executed between NOIDA
 and respondent-societies, which is for a period of 99          C
 years, itself indicates that the lessees had agreed to the
 allotment of the land on lease for the purpose of
 constructing residential buildings for its members. A
 perusal of the clauses of the lease deed would reveal the
 vr;ry starkly patent fact that most of the covenants place     D
 ohligations on the lessees as well as on the sub-lessees
 and if the covenants are in any manner violated, the lease
 would be liable for forfeiture under Section 14 of the Uttar
 Pradesh Industrial Development Act, 1976. While sub-
 clause 38 and 3C of the lease deed say that the                E
 conditions of the lease deed will be binding on the sub-
 lessees as well; clause 5 provides that the lessees shall
 construct the building on the allotted land in accordance
with the plan, elevation and design to be approved by the
lessor. Further, Clause 15 of the lease deed stipulates that    F
on the breach of the conditions of the transfer by the
lessee or any other person claiming through or under
him, it will be open for the lessor i.e. NOIDA to re-enter
the demised premises to determine the lease. It would be
clear from a reading of these provisions that the sub-          G
lessees have been fastened with several obligations vis-
a-vis. the demised premises and further more, even more
significantly, the obligation lies on the lessees to
construct the buildings or flats, as the case may be, at
their own cost and thereafter transfer the same to
                                                                H
    4      SUPREME COURT REPORTS            (2010] 12 S.C.R.

A   individual members i.e. the sub-lessees. In this
    background, the impugned notices postulating the
    execution of tripartite deeds flows not only from the
    clauses of the lease deed executed between the NOIDA
    and AWHO but also from the supervisory authority which
s   is placed on NOIDA by virtue of the provisions of Section
    7 of the 1976 Act. [Paras 18, 19 and 20] [13-G-H; 14-A-B;
    16-E-G; 17-B; F-G]

       1.2. The question as to whether the sub-lessees had
  themselves constructed the structures is itself in doubt.
C In the affidavit filed on behalf of AWHO [respondent-
  society], it has been specifically mentioned that the funds
  of the organization were raised by AWHO mainly from the
  advances/deposits of the allottees, as also from the
  borrowings from financial institutions and that the
D respondent organization i.e. AWHO, therefore,
  constructed the dwelling units with the funds contributed
  by the allottees and also funds raised on loan from the
  financial institutions. No record was produced to
  substantiate the plea, that the super-structures had been
E constructed by the allottees at their cost. [Paras 20, 21]
  [18-A-C; 19-C-D]

       1.3. It is also evident from the reply of AWHO that it
  had constructed the dwelling units in NOIDA and the draft
F bipartite sub-leases for the transfer of dwelling units to
  the allottees had been submitted by AWHO to NOIDA ,
  and pursuant thereto the registration of tripartite
  documents had commenced. In the affidavit it has further
  been deposed that no stamp duty had been charged on
  the lease deed in favour of AWHO and stamp duty was
G proposed to be charged for the first time on the execution
  of the tripartite deeds and that though the allottees were
  entitled to the ownership of land and structure, but the
  same would be conveyed to the individual allottees only
  on the execution of the registered and stamped
H documents, as per the provisions of the Registration Act,
        N.0.1.D.A. v. ARMY WELFARE HOUSING                     5
                      ORGANIZATION

the Stamp Act and the Transfer of Property Act. Item 35            A
of Schedule I to the Stamp Act calls for the payment of
stamp duty on leases and sub-leases. In the background
of this Statutory provision, it is not open for the
respondents to say that stamp duty was not payable.
(Paras 22, 24] (19-F-H; 20-A-F-G]                                  B

     1.4. The respondent-society [AWHO] though
registered under the Societies Registration Act has
certain characteristics which would enable it to hold
property and, therefore, transfer of the land cum super-
structure would be by way of a sub-lease from the lessor           C
i.e. NOIDA to the lessee which is the AWHO to the sub-
lessees who are the individual allottees, by way of a
stamped and registered document. A lease deed or sub-
lease of immovable property would be compulsorily
registerable under Section 17(1)(d) of the Registration Act        D
and Section 107 of the Transfer of Property Act. In the
absence of such a document, Section 49 of the
Registration Act visualizes no legal effect or an effective
transfer by way of a lease or sub-lease. [Paras 26, 30] (22-
B-C; 24-A-B]                                                       E

     lflachi Devi & Ors. vs. Jain Society, Protection of Orphans
India & Ors. 2003 (8) SCC 413 - held inapplicable.

    Board of Trustees, Ayurvedic and Unani Tibia College,
Delhi vs. State of Delhi AIR 1962 SC 458 and Lachhman              F
Dass vs. Ram Lal 1989 (3) SCC 99, relied on.

                      Case Law Reference:
    1989 (3) sec 99           relied on              Para 14
                                                                   G
    2003 (8) sec 413          held inapplicable      Para 15
    AIR 1962 SC 458           relied on              Para 26
    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
3625 of 2006.                                                      H
    6        SUPREME COURT REPORTS               [2010) 12 S.C.R.


A          From the Judgment & Order dated 14.10.2004 of the High
    , C'ourr of Judicature at Allahabad in W.P. Nos. 18732 of 2000,
      30637 of 1999, 9711of2000, 13560, 12317, 19095, 2881 of
      2003 & 13814 of 2003.

                                 WITH
B
     C.A. Nos. 2938, 2939, 2941, 2942, 2943, 2945, 2944 of 2005,
     3607, 3605, 3621, 3618, 3608, 3604, 3606 & 3603 of 2006.

          Sunil Gupta, Mahendra Anand, Shail Kr. Dwivedi,
c    Ravindra Kumar, Gunnam Venkateswara Rao, Vandana
     Mishra, Uttara Babbar, Jatinder Kumar Bhatia, Kamlendra
     Mishra, Shrish Kumar Mishra, Neeraj Jain, Abha R. Sharma,
     D.S. Parmar, Susheel Singh Tomar, Arvind Kumar Tewari (for
     Ranjan Mukherjee), K.V. Mohan, Mridula Ray Bhardwaj,
D    Praveen Chaturvedi, Kamlendra Mishra, Anitha Shenoy,
     Dinesh Kumar Garg, Manjila Gupta, P.R. Kovilan Poongkuntran,
     Nituraj Prakash, Naresh Kumar, Madhu Sikri, Abhisth Kumar,
     Archana Singh, Deepak Singh, Sunita Pandit, Nishant Yadav
     for the appearing parties.

E        The Judgment of the Court was delivered by

        HARJIT SINGH BEDI, J. 1. These appeals are directed
  against the Judgment of the Division Bench of the Allahabad
  High Court dated 14th October, 2004 whereby the writ petition
F filed by the respondents herein has been allowed and the letters
  issued by New Okhla Industrial Development Authority
  (hereinafter called the 'NOIDA') dated 13th November, 2002
  and 7th January, 2003 have been quashed. Aggrieved by the
  decision of the Division Bench, the respondents in the High
G Court are the appellants before us.

          2. The facts leading to these appeals are as under:-

         3. The writ petitioners-respondents, Societies registered
     under the Societies Registration Act, 1860 namely The Indian
H
       N.0.1.D.A. v. ARMY WELFARE HOUSING                         7
       ORGANIZATION [HARJIT SINGH BEDI, J.]
Railway Welfare Organization (IRWO), the Air Force Naval               A
 Housing Board (AFNHB), the Army Welfare Housing
Organization (AWHO) and several others filed writ petition in
the Allahabad High Court impugning the letters/notices dated
 13th November, 2002 and 7th January, 2003 and other similar
 notices by which NOIDA had directed the individual members            B
of the Housing Societies to execute tripartite deeds, the other
two parties being the Housing Societies, as the lessee, and
 NOIDA, as the lessor, for the sale of the super-structure which
 had been built on the land allotted to these Societies and for
further restraining the State Government, Naida etc. from              C
charging any stamp duty on the execution of the deeds. The
 petitioners also pleaded that the land had been allotted to the
 Societies by NOIDA and that the super-structure thereon had
 been built solely on the contributions made by the individual
 members as the said Societies did not have any corpus of their
                                                                       0
own. It was further pointed out that the buildings had been
constructed in a phased manner over a period of time and, the
Societies being the lessees of the land in question were not
the owners of the super-structure so as to bind the individual
members to the covenants that had been subscribed to by the
Societies with NOIDA the lessor. It was further highlighted that       E
 NOIDA had not contributed anything towards the cost of
construction of the super-structures and that the only role
performed by it was the sanctioning of the building plans and
the directions to execute tripartite deeds for the sale of the
super-structure of the residential units or sub-leases for the land,   F
was a superfluous exercise, which was not backed by any
statutory authority, or contractual obligation the more so that it
did not fall in the definition of sale under Section 54 of the
Transfer of Property Act, 1882. The basic argument was that
the petitioners could not be compelled to buy something which          G
was already their own.

   4. The stand of the writ petitioners was controverted by
NOIDA and several pleas were raised.
                                                                       H
    8        SUPREME COURT REPORTS                [2010] 12 S.C.R.


A       5. It was submitted that a writ petition directed against the
    issuance of a notice was not maintainable and that as the
    dispute in effect was as to the terms of a contract, it could not
    be adjudicated upon by the High Court in its writ jurisdiction
    under Article 226 of the Constitution.
B
       6. It was submitted on merits that the petitioners had
  consented to the execution of tripartite deeds and that the lease
  deeds entered into between the NOIDA and the Societies
  clearly stipulated that a sub-lease would be executed between
  the Societies and the members/allottees and that the sub-
C lessees herein above referred had to abide by the terms and
  conditions of the lease deed. It was pleaded that the provisions
  of the Uttar Pradesh Industrial Development Act, 1976
  (hereinafter called the '1976 Act') were binding on the sub-
  lessees and that the costs of the stamp duty and registration
D charges were to be borne by them and that Section 7 and 14
  when read together provided for the resumption of a site in case
  of a breach of a condition of the lease or sub-lease.

       7. The State of U.P. supporting NOIDA, pleaded that the
E members of the Societies had sub-leased the land from the
  Societies on the terms and conditions settled between them
  and as the land had been taken on lease by the Societies from
  NOIDA and the consideration had been paid by the Societies
  in advance the transactions were liable to stamp duty under
F Sub-Section (6) of Section 2 of the Stamp Act 1899 and that
  a tripartite deed envisaged between the parties was
  chargeable to stamp duty on the proportionate cost of the land
  as well as the cost of the super-structure built thereon.

       8. The High Court examined the various aspects raised
G before it and concluded that a distinction had to be made
  between contracts entered into between two private individuals
  and a contract where one of the parties was the State, or an
  instrumentality of the State, and that in the first mentioned case
  no writ would lie in relation to such a contract and the parties
H would have to be relegated to the civil court. It further held that
       N.0.1.D.A. v. ARMY WELFARE HOUSING                        9
       ORGANIZATION (HARJIT SINGH BEDI, J.]

in the latter case, it would be open to the High Court to entertain   A
the writ petition and to examine as to whether any constitutional
provision has been violated more particularly where a claim was
made that the State or an instrumentality of the State
respondent was acting in a discriminatory and arbitrary manner.
                                                                      B
     9. In this background, the Division Bench observed that
admittedly the land have been taken on lease from NOIDA by
the Societies on which the individual members had built their
houses on the basis of contributions made by the individual
members as the Societies themselves did not have any corpus           C
of funds. It further pointed out that the flats/apartments had been
constructed by the Societies on a self-financing arrangement
under which the construction of the super-structure was paid for
in installments by the allottee members and in this view of the
matter, there was no sale of the super-structure in favour of the
members and the demand raised thereby on the basis of the             D
two notices was arbitrary and unreasonable and violated Article
14 of the Constitution. The Division Bench also supported its
findings by referring to several judgments of this court.

      10. The Court then went into the merits of the controversy      E
and observed that the lease deeds executed by NOIDA with
the various Housing Societies which were the writ petitioners,
the basic covenants were the same and related primarily to
paragraphs 2 to 4 and 12 to 14 and the Societies-writ-
petitioners represented the interests of the members                  F
collectively and that the members were bound by the terms of
the bye-laws of the Societies which postulated that the land
allotted to the Societies would be handed over to the Societies
for the construction of flats/apartments and on the basis of a
lease deed executed between NOIDA and the Societies only.
                                                                      G
    11. The Court collated the various paragraphs of the lease
deed and held that they referred only to the transfer of the land
and there was no reference whatsoever that the building
constructed thereon at a later stage would also be treated to
have been demised by the lessor. The Court also observed              H
    10       SUPREME COURT REPORTS                   [2010] 12 S.C.R.


A   that the provisions of Section 108 (h) of the Transfer of Property
    Act that the building also belonged to the owner of the land was
    not applicable to India in the light of the various pronouncement
    of this court and various High Courts as well.

         12. The court, in conclusion, observed that in the light of
8
    the aforesaid facts, NOIDA could not compel the Societies or
    the individual members of the Societies to execute tripartite
    sub-leases in terms of the notices and observed as under:

         "The allottee members, as owners of the flats/apartments,
c        built from the contributions made by these persons cannot
         be compelled to purchase it from the society. It amounts
         to compelling a full owner of the flaUapartment to purchase
         the property already owned by him, from the society of
         which he is a member and to which it had contributed for
D        purchase of and for construction of building. Such a
         transfer will be fictitious and involuntary, and thus a void
         transaction under the Indian Contract Act. It will be neither
         a sale under section 54, nor a lease under Section 105
         for the Transfer of Property Act 1882"
E
         13. The Writ Petitions were accordingly allowed in the
    following terms:

         "All the writ petitions are consequently allowed. The
         impugned notices published and issued by NOIDA and its
F        officers, directing the petitioners to enter into the tripartite
         deeds are set aside. The NOIDA and other respondents
         are restrained from compelling the petitioners to execute
         the tripartite sale deed of super structure of flat and sub
         lease deed of land, and from requiring payment of any
G        stamp duty and registration fees on such documents. No
         order as to costs."

        14. Mr. K.K.Venugopal, the learned senior counsel for the
  appellants, has made several submissions before us. He has
H first pointed out that the observation of the Division Bench in
       N.0.1.D.A. v. ARMY WELFARE HOUSING                        11
       ORGANIZATION [HARJIT SINGH BEDI, J.]
the High Court that there was no provision for the execution of        A
a tripartite deed under the lease deed executed between
NOIDA and the respondent AWHO was contrary to the record
as several clauses of the lease deed read cumulatively clearly
visualized the execution of tripartite deed featuring NOIDA,
AWHO and the individual sub-lessees. He also pleaded that              B
Section 17(1)(d) of the Registration Act, 1908 when read with
Section 105 of Transfer of Property Act, 1882 clearly visualized
the registration of a lease or sub-lease and Section 49 of the
 Registration Act dealt with the consequences of non-
registration. He further pointed out that a lease executed             c
 included a sub-lease as per Section 107 of Transfer of Property
Act and such a document required compulsory registration. He
 has also submitted that in the absence of a registered document,
any document purporting to be a lease would be a mere waste
 paper, as held by this Court in Lachhman Dass vs. Ram Lal
                                                                       0
 1989 (3) SCC 99. It has also been pleaded that Entry 35 © of
 Schedule I B of the Stamp Act as applicable to the State of
 Uttar Pradesh postulated that stamp duty was payable not only
on the land but on the super-structure as well and the findings
of the High Court to the contrary were, therefore, not
maintainable. It has also been submitted that Section 2(g) of          E
the 1976 Act postulated the need for a tripartite deed between
NOIDA, AWHO and the sub-lessees and that NOIDA's authority
to issue the impugned instructions flowed from Section 6
thereof. It has also been pointed out that the AWHO had, during
the course cif this litigation and even before had taken conflicting   F
stand as in the affidavit of Col. Upal of October 2007, it had
been specifically deposed that a sub-lease was contemplated
in the lease deed executed between NOIDA and AWHO and
that in a letter from the AWHO to Brig. Gur Dyal dated 19th of
June 1990 it had been specified that a tripartite document was         G
to be executed and a specimen of the document was also
enclosed along with the letter. It has been highlighted that
thereafter AWHO had taken a volte face and in the affidavit filed
by Col. Sabharwal, a contrary stand had been taken that a
tripartite deed was not visualized in the lease deed executed          H
    12      SUPREME COURT REPORTS                [2010] 12 S.C.R.


A between NOIDA and AWHO. It has, accordingly, been pointed
  out that on account of this confusion and other reasons a large
  number of individual members, that is sub-lessees, had in fact
  executed tripartite deeds, as required by the instructions. In the
  rejoinder filed by NOIDA, the fact that the respondents had been
B taking shifting stands has, once again, been highlighted and
  as further evidence of this fact, attention has again been drawn
  by Mr. K.K.Venugopal to the affidavit of Col. Sabharwal of
  January 2008 wherein the affidavit of Col. Upal has been
  completely disowned.
c        15. Mr. Anand for the respondents has, however,
   controverted the stand taken by the appellants. It has been
   pointed out that the land had been allotted to AWHO and other
   Societies and the Societies formed by members of the
   Defence Services had been exempted from the payment of
D stamp duty on the premium for the lease whereas in the case
   of Societies set up of civilians, stamp duty had been made
   leviable and had, in fact, been paid, and there was no
   justification now, after 15 years from the allocation of the land,
   that the AWHO and sub-lessees had been called upon to
E execute a tripartite document and also to pay stamp duty and
    registration charges. He has also pointed out that the lease
   deed between the NOIDA and AWHO pertained only to the land
    and had nothing to do with the super-structure and as the
    residential building on the land had been built by the lessees
F themselves, they could not be called upon to execute tripartite
 • deeds along with NOIDA and AWHO. The learned counsel has
    also referred to several clauses of the lease deed executed
    between the NOIDA and AWHO in support of this plea. He has
    further submitted that a society registered under the Societies
G Registration Act was not a body corporate or a juristic person
    and its membership could not be said to be distinct from the
    society and as such there is no question of transfer of property
    from the AWHO to its members. In this connection Mr. Anand
    has relied upon 11/achi Devi & Ors. vs. Jain Society, Protection
H of Orphans India & Ors. 2003 (8) SCC 413.
       N.0.1.D.A. v. ARMY WELFARE HOUSING                      13
       ORGANIZATION [HARJIT SINGH BEDI, J.]

     16. We have considered the arguments advanced by the            A
learned counsel for the parties. At the outset, it must be pointed
out that some of the arguments that have been raised by the
learned counsel were not urged, or if urged, were not dealt with
by the High Court. The High Court has, in fact, proceeded
primarily on the interpretation to be put on the lease deed          B
executed between NOIDA and AWHO and has been influenced
also by the fact that as the structures on the land allotted to
AWHO had been built by the sub-lessees, and as the structures
belonged to them the question of any further transfer by way of
sub-lease as per a tripartite deed was not envisaged. It is this     c
background, we have examined the arguments raised by the
learned counsel.

      17. NOIDA has been set up under the provisions of the
 1976 Act. Section 2(a) thereof defines amenities which include
 roads, water supply, street lighting, power supply, sewerage D
 and sub-clauses (d), (e) and (f) deal with the provision of basic
 infrastructure for industrial, commercial and residential
 purposes whereas Section 6 (2) deals with the obligation of
 NOIDA towards the land development of the area. Section 7
 authorizes NOIDA to transfer the land by way of sale, lease or E
 otherwise whether by auction or allotment on such terms and
conditions, as it may think fit to impose. Sections 13 and 14
provide for the imposition of a penalty and mode of recovery
o_f arrears and resumption of the property for bread,h of
conqitions of transfer and Section 17 gives overriding effect to F
the 1976 Act vis-a-vis other statutes. It is the case of the
appellants that the impugned notices were envisaged under the
lease deed between NOIDA and AWHO as well as the
aforesaid provisions of the 1976 Act and for the AWHO and
the sub-lessees to contend that they could not be called upon G
to execute tripartite deeds was, therefore, not acceptable.

     18. We have perused the lease deed executed between
NOIDA and AWHO. We reproduce herein below some of the
relevant clauses. The lease deed which is for a period of 99
                                                                     H
    14       SUPREME COURT REPORTS                   [2010] 12 S.C.R.


A   years itself indicates that the lessees had agreed to the
    allotment of the land on lease for the purpose of constructing
    residential buildings for its members. Clause 3(b), 3(c), 5, 7,
    8, 10, 11and12 are reproduced below:-

               "38. That the lessee shall in no case assign
B
         relinquish (except in favour of the lessor), let transfer or
         part with possession of the demised premises except by
         way of sub-lease as provided in this lease to the
         Cooperative Society of the members or directly to the
         individual registered member of the lessee whose list will
c        be provided to the lessor within three months of such
         transfer. Any subsequent transfer will be made by the
         members with prior concurrence of the A WHO/Co-
         operative Society and NO/DA and will be subject to
         condition of payment of transfer charges as levied from
D        time to time but subject to a maximum of 25% of the
         unearned increase in the value of land.

               3C. This lease deed will form part of sublease
         executed between A WHO and Cooperative Society or to
E        individual members. All conditions contained herein
         binding on the sub-lessees also.

                5. The lessee shall construct the building (group
         housing pockets) on the demise premises in accordance
         with the plan elevation and design and in a position to be
F        approved by the lessor or any officer authorized by the
         lessor in that behalf in writing and in accordance with the
         building regulations or direction existing or to exist in future.

               The lessee shall be required to commence
G        construction of flats/houses within one year from the date
         of possession letter and complete the same within a
         period of 7 years extendable to 10 years from the date of
         possession failing to which the lease shall be revoked and
         10% of amount deposited shall be forfeited and
H        possession of the plot and structures thereon unless
  N.0.1.D.A. v. ARMY WELFARE HOUSING                       15
  ORGANIZATION [HARJIT SINGH BEDI, J.]
removed by the lessor within time specified by the lessee        A
may be taken over by the lessor and lessee will not be
entitled to any compensation.

       7. That the lessee will obey and submit to all
direction issued or regulations made by the lessor now
                                                                 B
existing or hereinafter to exist so far as the same are
incidental to the possession of immovable property or so
far as they effect the health or convenience of the other
inhabitants or the place.

      8. That the lessee will at his own cost erect on the       C
demised premises in accordance with the plans, deviation
and design to be approved by the lessor or any other
authorized by the lessor in that behalf in writing and in a
substantial and workman like manner, a building only with
all necessary, sewers, drains and other appurtenances            D
according to the directions issued or regulations made in
respect of buildings, drains, latrines and connection with
sewer.

       10. That the lessee will not make, or permit to make,
                                                                 E
 any alteration in or additions to the said buildings or other
erections for the time being on the demise premises erect,
or permit to be erected any new building in the demised
premises without the previous permission in writing of the
lessor and except in accordance with the terms of such
permission and the land, if any, approved by the lessor or       F
any officer authorized by the lessor or in that behalf and in
case of any deviation from such terms or plan, will
immediately upon receipt of notice from the lessor or such
requiring him to do, correct such deviation for the space
of one calendar month after the receipt of such deviation        G
to be corrected at the expenses of the lessee which
expenses the lessee hereby agrees to reimburse by
paying to the lessor such amount as the lessor (whose
decision shall be final) shall fix in that behalf.
                                                                 H
    16      SUPREME COURT REPORTS                [2010] 12 S.C.R.


A              11. That the lessee shall use the demised premises
         only for the purpose of constructing a building for housing
         its members and for no other purpose.

               12. That the lessee shall not assign, transfer,
         relinquish (except in favour of lessor) sublet or otherwise
B
         part with possession of the demised premises or any part
         thereof or the house constructed thereon or any part
         thereof, except first to Co-operative Society of its members
         and then to or individual members, without the previous
         permission in writing of the lessor.
c
               Provided that the lessee may be permitted by the
         lessor to create a mortgage for purposes of securing loan
         from State Central Government/Life Insurance Corporation,
         Scheduled Bank/Housing Board/HUDCO and similar
D        statutory bodies and in that case the right to mortgages
         shall be as may be provided in the deed of mortgage,
         accrue to such institution subject to NOIDA retaining first
         charges for recovery of ground rent and other dues, taxes
         and charges."
E
         19. A perusal of the aforesaid clauses would reveal the very
    starkly patent fact that most of the covenants place obligations
    on the lessees as well as on the sub-lessees and if the
    covenants are in any manner violated, the lease would be liable
    for forfeiture under Section 14 of the 1976 Act. We may, in
F   particular, highlight sub-clause 38 and 3C which says that the
    conditions of the lease deed will be binding on the sub-lessees
    as well. Clause 5 provides that the lessees shall construct the
    building on the allotted land in accordance with the plan,
    elevation and design to be approved by the lessor and further
G that the Jessee shall be required to commence construction
  within the period of one year from the date of possession.
  Clause 8 further clarifies that the lessees would erect the
  building on the basis of the approved design and Clause 11
  once again reiterates that the demised premises shall be
H used by the lessee only for construction of buildings, offices
        N.0.1.D.A. v. ARMY WELFARE HOUSING                      17
        ORGANIZATION [HARJIT SINGH BEDI, J.]
and houses for no other purposes whereas Clause 12                    A
stipulates that the lessee A WHO wiil not transfer etc. or part
with the possession of the demised premises or the house
constructed thereon except first to the Cooperative society or
its members and then to individual members without the
previous permission of the lesser in writing. Clause 15               B
stipulates that on the breach of the conditions of the transfer
by the lessee or any other person claiming through or under him,
it will be open for the lessor i.e. NOIDA to re-enter the demised
premises to determine the lease. It would be clear from a
reading of these provisions that the sub-lessees have been            c
fastened with several obligations vis-a-vis the demised
premises and further more, even more significantly, the
obligation lies on the lessees to construct the buildings or flats,
as the case may be, at their own cost and thereafter transfer
the same to individual members i.e. the sub-lessees. It is            0
extremely significant that paragraph 69 of the Master Brochure
of July 1987 issued by the AWHO, as amended up to May
2007 reads as under:-
     "69. Organization may at its discretion on a written request
     from the Allottee, give possession on such conditions as         E
     it may stipulate before instruments of transfer are
     executed and registered."

     20. We are, therefore, of the opinion that in this
 background the impugned notices postulating the execution of         F
tripartite deeds flows not only from the clauses of the lease
deed executed between the NOIDA and AWHO but also from
the supervisory authority which is placed on NOIDA by virtue
of the provisions of Section 7 of the 1976 Act. The observation
of the High Court that the structures built on funds provided by      G
the sub-lessees is to our mind of no consequence. Even
assuming that such was the position, this was an arrangement
inter-se AWHO and its members and would not detract from
the obligations placed on AWHO and the sub-lessees to
execute tripartite deeds. We, however, see from the above
                                                                      H
    18       SUPREME COURT REPORTS                [2010] 12 S.C.R.


A facts that the question as to whether the sub-lessees had
  themselves constructed the structures is itself in doubt. In the
  affidavit of Col. Upal it has been specifically mentioned that the
  funds of the organization were raised by AWHO mainly from
  the advances/deposits of the allottees, as also from the
B borrowings from financial institutions and that the respondent
  organization i.e. AWHO therefore constructed the dwelling units
  with the funds contributed by the allottees and also funds raised
  on loan from the financial institutions. In paragraph 9 of the
   aforesaid affidavit, it is deposed by Col.Upal as under:
c
          "Upon completion of the housing project the respondent
          organization then forms a "user committee" of the allottees
          who subsequently form a 'registered maintenance society'
          for the maintenance and upkeep of the common areas and
D         amenities of the housing project. The registered
          maintenance society of the allottees so formed is then
          given the common area maintenance funds as collected
          by the respondent organization during the payment of
          installments towards the cost of the development of their
          dwelling units. Thereafter, as and when the a//ottee(s)
E
          desire to have a registered title deed of the dwelling unit
          executed in their favour, the respondent organization
          registers the same as per the terms and conditions of the
          land allotting agency and office of the sub-registrar upon
         ·payment of the required stamp duty and registration
F         charges payable by the allottee."

       21. As already indicated above, the above meaningful
  admission was sought to be explained away in the subsequent
  affidavit of Col. Sabharwal wherein (in paragraph 5) he
G contradicted the affidavit of Col. Upal by stating that all the
  expenses involved in the procurement of land on lease hold
  basis, payment of lease costs, lease rent, construction cost of
  dwelling units, the common amenities and salary required etc.
  were met from the contributions made by the allottees of the
H housing scheme and some loans to procure land from the
       N.0.1.D.A. v. ARMY WELFARE HOUSING                         19
       ORGANIZATION [HARJIT SINGH BEDI, J.]
Government of India or the General Branch of the Army Group             A
Insurance Scheme had been taken and that the interest on the
loans and the principal amounts had been refunded from the
contribution made by the allottees. It has, however,· been
admitted that in the year 1989-90 several allottees had
approached AWHO for execution of sub-leases of their dwelling           B
units, and the respondent AWHO under the impression that
stand of NOIDA was bona fide and legally correct had under
mistaken advice directed the execution of the tripartite deeds.
In other words, it has been admitted that a large number of
allottees had executed the tripartite deeds, as required by the         c
impugned notices. Col. Sabharwal has, accordingly, in a
manner, sought to distance AWHO from the letter issued on
behalf of AWHO to Brig. Gur Dyal. It is significant that despite
requests to AWHO, no record was produced to substantiate
the plea, that the super-structures had been constructed by the         D
allottees at their cost. We are, therefore, of the opinion that the
Division Bench to have held that the structures had been built
exclusively by the allottees and therefore they were deemed to
be the owners of the structures, is. on uncertain ground. In this
background, we are not called upon to examine the constitution
and charter of AWHO or the purpose of its being set up, though          E
a great deal of time and energy had been expended on this
aspect.

      22. It is also evident from the reply of Col. Upal (Paragraph
 10) that AWHQ_tiad constructed the dwelling units in NOIDA             F
and the draft bipartitesuo-:.1eases-forthe-1rao$fer of dwelling units
to the allottees had been submitted by AWH0-foNOIDAon-4th
April 1989 and pursuant thereto the registration of tripartite
documents had commenced. In the affidavit it has further been
deposed that no stamp duty had been charged on the lease                G
deed in favour of AWHO and stamp duty was proposed to be
charged for the first time on the execution of the tripartite deeds
and that though the allottees were entitled to the ownership of
land and structure, but the same would be conveyed to the
individual allottees only on the execution of the registered and
                                                                        H
    20      SUPREME COURT REPORTS                  [2010] 12 S.C.R.


A   stamped documents, as per the provisions of the Registration
    Act, the Stamp Act and the Transfer of Property Act.

         23. It has also been submitted by Mr. Venugopal and Mr.
    Sunil Gupta, the learned senior counsel for the appellants, that
8   the payment of stamp duty and the registration of the tripartite
    deeds were essential as per the Stamp Act and the
    Registration Act. The learned counsel have referred us to
    Section 2(16) and Entry 35 of the Stamp Act. Section 2(16)
    reads as under:

C             Sec.2(16). "Lease" means a lease of immovable
         property, and includes also -

                (a)    a patta;

                (b)    a Kabuliyat or other undertaking in writing,
D
                       not being a counterpart of a lease, to cultivate,
                       occupy, or pay or deliver rent for, immovable
                       property;

                 (c)   any instrument by which tolls of any
E                      description are let;

                 (d)   any writing on an application for a lease
                       intended to signify that the application is
                       granted."

F   Item 35 of Schedule I calls for the payment of stamp duty on
    leases and sub-leases. This fact was not seriously disputed by
    the learned Counsel for the respondents. In the background of
    this Statutory provision, it is not open for the respondents to say
    that stamp duty was not payable.
G
       24. Mr. Anand, has however, submitted that a society
  registered under the Societies Registration Act was not a body
  corporate or a juristic person and the society i.e. AWHO and
  its members were one entity and there was, accordingly, no
H question of transferring by way of sub-lease any property from
       N.0.1.D.A. v. ARMY WELFARE HOUSING                         21
       ORGANIZATION [HARJIT SINGH BEDI, J.]
the AWHO to the sub-lessees. This argument to our mind is .A,
without force in the light of what has been held above and that
in the case of Brig. Gur Dyal the stand taken was that the sub-
lessees should execute a document directly with NOIDA.
bypassing AWHO, as that was deemed to be the right
procedure. Mr. Anand's reliance on lllachi Devi case is B
misplaced for the simple reason as no ownership has been
transferred to the cooperative society i.e. AWHO by NOIDA. In
this background it must be held that word 'vest' in Section 5 of
the Societies Registration Act does not envisage a lease deed
and the matter would, if at all, be covered by Section 5 A, an C
amendment pertaining to the State of Uttar Pradesh alone
which provides:

           "Sec.SA. Restriction on transfer of property. - (1)
     Notwithstanding anything contained in any law, contract or
     other instrument to the contrary, it shall not be lawful for the   D
     governing body of a society registered under this Act or
     any of its members to transfer, without the previous
     approval of the court, any immovable property belonging
     to any such society.
                                                                        E
           (2) Every transfer made in contravention of sub-
     section (1) shall be void."

     25. We are, however, not inclined to examine the
implication of Section 5A for the simple reason that many of
those who are likely to be affected by its interpretation are not       F
parties to the Writ Petition.

     26. Mr. Gupta has, further, submitted that a Society was a
legal entity in law distinct from its members as the property
vested in living members, Trust or Board and as such the                G
Society could hold property, although it may not be a juristic
person. For this argument, Mr. Gupta has placed reliance on
Board of Trustees, Ayurvedic and Unani Tibia College, Delhi
vs. State of Delhi AIR 1962 SC 458. In this case, the
Constitution Bench was dealing with Sections 5 and 6 of the             H
    22      SUPREME COURT REPORTS                  [2010] 12 S.C.R.


A Societies Registration Act and the question as to whether the
  Tibia College Board set up under the Tibia College Act, 1952
  was a Corporation in Law. The Bench held that the Board was,
  indeed, not a Corporation but had the characteristics of a quasi-
  Corporation and though a registered society could not hold
B property but a quasi-Corporation would be deemed to be
  separate legal entity and entitled to hold property. We are,
  therefore, of the opinion that AWHO though registered under
  the Societies Registration Act has certain characteristics which
  would enable it to hold property and therefore transfer of the
c  land cum super-structure would be by way of a sub-lease from
  the lessor i.e. NOIDA to the lessee which is the AWHO to the.
  sub-lessees who are the individual allottees, by way of a
   stamped and registered document.

       27. It has also been submitted by the learned coun.sel for
D the appellant that registration of a tripartite deed was mandatory
  as per the provisions of Section 17(1 )(d) of the Registration Act
  read with Section 107 of the Transfer of Property Act. It has
  been pointed out that the Law Commission had highlighted the
  importance of the registration of documents and in this
E connection reference has been made to the 13th Report of the
  Law Commission. Paragraph 14 thereof reads as under:

                 "From this brief survey of the provisions of the Act it
         is clear that the object of the Registration Act is to preserve
         an authentic record of the terms of documents so that if a
F
         document be lost or destroyed or misplaced, a certified
         copy from the register can be obtained. Registration also
         facilitates the proof of execution of a document as its
         execution is admitted by the executant, before the Sub-
         Registrar. Yet another useful purpose that registration
G        serves is to enable any person intending to enter into any
         transaction relating to immovable property to obtain
         complete information relating to the title to such property
          and for the purpose to look into the register and obtain
          certified copies of the documents."
H
       N.0.1.D.A. v. ARMY WELFARE HOUSING                     23
       ORGANIZATION [HARJIT SINGH BEDI, J.]
     28. Our attention has also been drawn to Section 49 of the     A
Registration Act which talks of the effects of non-registration
of documents required to be registered and provides inter-alia
that non-registration of such a document would not affect any
immovable property comprised therein, or be received as
evidence of any transaction affecting such property. In             B
Lachhman Dass's case (supra) it has been held that a non-
registered sale deed would be a paper transaction having no
effect in transferring or creating any rights in the sub-lessees.
It has been observed thus:

           "The real purpose of registration is to se.cure that
                                                                    c
     every person dealing with the property, where such
     document requires registration, may rely with confidence
     upon statements contained in the register as a full and
     complete account of all transactions by which title may be
     affected. Section 17 of the said Act being a disabling         D
     section, must be construed strictly. Therefore,' unless a
     document is clearly brought within the provisions of the
     section, its non-registration would be no bar to its being
     admitted in evidence.
                                                                    E
and again

     the Section, however, enjoins registration in respect of any
     document, which purports not which intends to create a
     right in immovable property or declare a right in immovable
     property. It is not a question of declaration of an existing   F
     right."

       29. It has, accordingly, been submitted that it was in the
interest of the sub-lessees that they execute tripartite deeds
duly stamped and registered so that they could safeguard the        G
title to their properties and deal with them accordingly as they
were holding legal documents. It has been highlighted by the
learned counsel that the AWHO had on severaloccasions
realized the importance of the execution of the tripartite deeds
and had advised the Societies accordingly.                          H
    24       SUPREME COURT REPORTS                [2010] 12 S.C.R.


A       30. Concededly a lease deed or sub-lease of immovable
  property would be compulsorily registerable under Section 17
  (1 )(d) of the Registration Act and Section 107 of the Transfer
  of Property Act. In the absence of such a document. Section
  49 visualizes no legal effect or an effective transfer by way of
B a lease or sub-lease.

       31. We have, therefore, no hesitation in setting aside the
  judgment of the Division Bench of the High Court and to allow
  the appeals and dismiss the writ petitions. We do so, however,
C with no order as to costs.

       32. Before we part with the judgment, we must make a
  further direction. During the course of arguments, it was pointed
  out that notices had been issued by NOIDA calling for the
  execution of tripartite deeds failing which penalties etc. would
D be imposable on the individual sub-lessees, more particularly
  as a large number of allottees had already signed such deeds.
  In the light of the fact that this has been a long drawn litigation
  and involves primarily serving or retired personnel of the armed
  forces, we direct that if the sub-lessees execute tripartite deeds
E as per the requirement of NOIDA within a period of six months
  from today, no penalty or extra charge would be made payable
  by such allottees. We clarify that if the tripartite deeds are not
  executed within the period of six months, the law or instructions
  would take their own course and NOIDA would be entitled to
F levy such charges as it was entitled to thereunder.

    B.B.B.                                    Matters disposed of.