Full Judgment Text
NEUTRAL CITATION NO. 2022/DHC/005237
* IN THE HIGH COURT OF DELHI AT NEW DELHI
st
% Pronounced on: 1 December, 2022
+ RFA 11/2012 & CM APPL. 135/2012
KHOSLA MEDICAL INSTITUTE ..... Appellant
Through: Mr. Arvind Varma, Sr. Advocate
with Ms. Iti Sharma and Mr.
Puneet Sharma, Advocates
versus
DELHI DEVELOPMENT AUTHORITY & ANR ..... Respondents
Through: Ms. Shobhana Takiar, Standing
Counsel for DDA
CORAM:
HON’BLE MR. JUSTICE CHANDRA DHARI SINGH
J U D G M E N T
CHANDRA DHARI SINGH, J.
1. The instant Regular First Appeal under Section 96 read with Order
XLI of the Code of Civil Procedure, 1908, (hereinafter “CPC”) has been
filed on behalf of the appellant institution, seeking the following reliefs:-
“a. Set aside the order/judgment dated 14.11.2011
passed by Sh. O.P. Gupta District Judge-cum ASJ -
Incharge (West)/ ARCT Delhi in suit no. 652A/2011
(Old Suit No. 2498/1995).
b. Allow the prayers as made in the suit before the
Ld. trial court.
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c. Pass such order/orders as this Hon'ble Court may
deem fit and proper in the facts and circumstances of
the case.”
2. A perusal of the record unravels the following facts that have
culminated into the controversy which falls for consideration before this
Court:
a. The appellant is a Society which is formed with an objective
to establish, maintain, manage, control, and run a Medical Research
Centre registered under the Societies Registration Act, 1860 in the
year 1977. Two brothers J.C. Khosla and K.C. Khosla decided to
set up the institute to establish, maintain, manage, control, and run
Medical Research Centre in various systems of medicines to render
medical aid/relief for the said purpose and to open establish,
maintain, manage, and control Dispensaries, Hospitals, Nursing
Homes, Maternity Houses, Sanitarium and medical and first aid
centre at different places.
b. A lease deed was registered between the appellant and the
respondent, i.e. the Delhi Development Authority (hereinafter
“DDA”), for allotting two plots 8228 sq. yds. and 1452 sq. yds. at
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Shalimar Bagh, West Delhi on 31 December, 1996.
c. The appellant raised construction on the said land by raising
funds from various sources and the structure of the hospital was
completed and the occupancy certificate was granted. In the year
1993, the Ayurvedic system of medicines was proposed to be
included in the services of the hospital and a new wing was
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thereafter opened in the appellant Institute in the name of
„Maharishi Ayurveda Arogya Dham‟.
d. During this period, the relationship between brothers J.C.
Khosla and K.C. Khosla, who were running the appellant Society,
started to strain and as contended before the Trial Court, J.C.
Khosla initiated several cases against K.C. Khosla and the
appellant Institute. Several complaints have been made including
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complaints dated 30 June 1994, 2 November 1994, and 12 July
1995. A complaint was also filed before the Income Tax
Authorities alleging that the appellant Institute had transferred the
property to third parties by inducting them as new members in the
Institute.
e. Thereafter, due to several complaints made against the
appellant, the respondent no. 1 issued a Show Cause Notice to the
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appellant dated 11 January 1995, asking it to show cause as to
why the Lease Deed should not be cancelled for violation of Clause
II(5)(a) of the Lease Deed. An observation was made therein that
the appellant was found to have transferred the plot and the
building to another entity and thereby, had violated the terms of the
Lease Deed.
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f. The appellant replied to the Show Cause Notice on 17
January 1995, stating therein that no transfer or sale of property
was made by the appellant of the premises in question. It was stated
that the Directors of the Society decided that an Ayurvedic System
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of medicine should be introduced as a part of the appellant Institute
to promote benefits to the patients. The said Ayurvedic wing was
being run and managed by the appellant Institute and was not
transferred to a third party.
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g. Ultimately, a Notice dated 7 December 1995 was served
upon the appellant by the respondent no. 2 stating that upon having
found the reply to the Show Cause Notice unsatisfactory, the Lease
Deed of the appellant was cancelled, and it was also directed to
vacate the premises and hand over the vacant possession.
h. The appellant alongwith K.C. Khosla, its Chairman, and
Kanwal Khosla, Senior Vice Chairman, approached the Court of
District Judge and Additional Sessions Judge, ARCT, Delhi,
(hereinafter “Trial Court”) seeking permanent injunction on the
property in question. The plaintiffs therein sought setting aside of
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the order dated 7 December 1995 terminating the Lease Deed of
the appellant and also sought injunction against the respondents.
i. On the said suit, the Court below passed the judgment dated
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14 November 2011, observing that the appellant herein was not
entitled to the relief of declaration or injunction that was sought by
it before the Court, and dismissed the suit of the appellant.
j. The appellant, being aggrieved by the said judgment, has
approached this Court seeking setting aside of the impugned
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judgment dated 14 November 2011.
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SUBMISSIONS
3. Mr. Arvind Varma learned senior counsel appearing on behalf of
the appellant submitted that the impugned order has been passed by the
Trial Court without proper appreciation of the fact on record. It is
submitted that the appellant obtained a loan of ₹2.6 crores from ICICI
Bank and IDBI Bank for the purpose of construction of the Hospital
building after obtaining all necessary approvals and sanctions.
4. It is submitted that while deciding the issue of non-compliance of
Section 53(B) of the Delhi Development Act, 1957 (hereinafter “DD
Act”) the Trial court failed to appreciate that the basic objective of the
provision is to settle the matter at a pre-litigation stage, however, once a
matter reaches any forum or Court of law, a dismissal on a mere technical
ground is erroneous. Reliance has been placed upon the judgment of a
Coordinate Bench of this Court in Col. A.B. Singh vs. Chunni Lal
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Sahani, RFA 96/2002 decided on 5 October 2011 and of a Division
Bench of this Court in Yashoda Kumari vs. MCD and Ors ., AIR 2004
Delhi 225.
5. It is submitted that in the instant matter, the suit before the Trial
Court was against the notice of dispossession served upon the appellant
and the claim of the appellant was well within the knowledge of the
respondent. It is further submitted that the purpose of notice under
Section 53B of the DD Act is at par with Section 80 of the CPC, i.e., to
bring to the authority the notice of a claim so that it may concede or
contest such claim. In the instant case, the suit before the Trial Court was
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instituted against the respondent in the year 1995 and since then the
respondent has been contesting the same on merits, hence, the suit could
not have been dismissed on a technical ground for the want of service of
notice under Section 53(B) of the DD Act.
6. It is also submitted on behalf of the appellant that the suit before
the Trial Court was filed by the appellant seeking injunction and
restraining the respondents and their agents, officers, servants,
representative from disturbing the actual and constructive possession of
the appellant on the land in question and from acting in furtherance of the
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notice dated 7 December 1995. It is submitted that the relief of
declaration sought by the appellant in the subject suit was only with
respect to the impugned notices to be declared as invalid and illegal,
however, the Trial Court incorrectly held that the suit was for declaration
and was not covered under the provisions of Sub-Section 3 of Section
53B of the DD Act.
7. To the findings of the Trial Court with respect to transfer of the
premises in question by the appellant, learned senior counsel for the
appellant further submitted that in order to facilitate proper functioning
and for the benefit of the patients, the decision of introducing Ayurveda
system of medicines was taken and the Ayurveda wing was opened. It is
submitted that to run the new wing, Ajay Prakash Srivastava and Anand
Prakash Srivastava were inducted as members to the appellant and this
induction, in no manner, whatsoever, amounted to transfer of rights and
title in the favour of a third party. There was no conveyance deed or other
document to show that the subject land was transferred.
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8. It is submitted that amongst the several cases initiated against the
appellant and K.C. Khosla, one of the cases was the case bearing no.
1336/94 filed by J.C. Khosla against the appellant under Section 92 of the
CPC, wherein an interim relief was granted by a Coordinate Bench of this
nd
Court vide order dated 22 June 1994, which thereafter came into the
jurisdictional limits of the Trial Court. In the said suit J.C. Khosla moved
an application under Order 39 Rule 2A of the CPC alleging violation of
the restraint/interim order passed by the Coordinate Bench of this Court
and produced newspaper cuttings to argue that the appellant had
advertised the sale of the Institute. However, the Coordinate Bench of this
Court has made the observation, after considering all the issues raised by
J.C. Khosla pertaining to the alleged transfer of society assets to the
Maharishi Ayurvedic Products and also the circumstances such as
affidavit of the property dealer and an advertisement in the newspaper
held that there was no transfer of assets of the appellant society and
merely induction of new members in the society and in the governing
body of the society did not tantamount to transfer of assets of the society.
It is therefore submitted that the issue of transfer of the premises in
question no longer remains res integra and had already been decided by
the Coordinate Bench of this Court. Thus, the Trial Court erred in
adjudicating upon the same issue qua the transfer of assets of the
appellant which had already been adjudicated upon by this Court.
9. It is further submitted that on the issue raised regarding transfer of
property in the name of a third party that on a complaint of J.C. Khosla,
the Assessing Officer of Income Tax Department conducted enquiry and
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observed that there was a transfer of hospital to the Maharishi Ayurved
Products Limited, therefore, Section 11 and 12 of the Income Tax Act,
1961 would not be applicable. However, Appellate Authority, i.e., the
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Commissioner of Income Tax, vide order dated 29 January 1997,
allowing the appeal by the appellant against the said observation of the
Assessing Officer, set aside order of Assessing Officer and held that
Maharishi Ayurved has only extended a loan to the appellant and not
transferred any property. Against the said order, the Income Tax
Department approached the Income Tax Appellate Tribunal, however, the
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appeal came to be dismissed vide order dated 8 May 2002.
10. Learned senior counsel appearing on behalf of the appellant
submitted that the Trial Court failed to appreciate that the
respondent/DDA witness admitted in his cross-examination that there was
no document in the nature of a conveyance deed in the record of the
respondent or even in their knowledge showing the transfer of any right
in the suit property in favour of a third party. Moreover, the respondent
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also acted in contravention of its Policy Decision dated 3 June 2009,
which was placed before the Trial Court, wherein it was decided that the
lease of institutional plots should not be cancelled on the ground of
change in management.
11. It is submitted on behalf of the appellant that the Trial Court failed
to appreciate that the respondent acted unreasonably and arbitrarily on the
complaint of J.C. Khosla without affording an opportunity to the
appellant and issued the Show Cause Notice and thereafter, the order of
cancellation of the Lease Deed was passed. The respondent authority did
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not consider that similar issues had already been decided by the High
Court. Moreover, the lease in favour of the fully operational appellant
institute was determined without according a personal hearing to the
appellant.
12. It is therefore, submitted that the impugned judgment is liable to be
set aside since the Trial Court has made erroneous observations and has
passed the impugned judgment contrary to the facts and evidence on
record.
13. Per Contra , Ms. Shobhana Takiar, learned Standing Counsel for
DDA, vehemently opposed the instant appeal, the contentions raised
therein, and the submissions made on behalf of the appellant. It is
submitted that the DDA land was allotted to the appellant Institute on pre-
determined rates for public utilities and community facilities. The land as
allotted to the society is held by the allottee as lessee of the President of
India on the terms and conditions prescribed by these rules and contained
in lease deed executed by the allottee. Therefore, the allottee is bound by
the terms and conditions of the Lease Deed as executed inter se the
parties.
14. It is submitted that upon receiving the complaint from J.C. Khosla,
an inspection was carried out on the site pursuant to which the Show
Cause Notice was issued to the appellant when terms and conditions of
the Lease Deed were found to be violated.
15. On the issue of transfer of property, it is submitted that the
complaint made by J.C. Khosla was supported by an advertisement in the
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Hindustan Times on 7 July 1993 for the sale of the Hospital.
Subsequently, another inspection was carried out and it was found that
M/s Maharishi Vidya Mandir Society was functioning from the premises
in question and two types of signboards were displayed at the site.
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Further, on 12 July 1995, another complaint was received that the
appellant institute has sold the property to Maharishi Ayurveda, and
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ultimately, the Lease Deed of the appellant was determined on 7
December 1995 and the appellant was directed to handover the
possession of the premises.
16. Qua the issue of notice under Section 53B of the DD Act, the
learned counsel for the respondent submitted that the findings of the Trial
Court were well in accordance with the settled law. The learned counsel
for the respondent submitted that Section 53B of the DD Act is
mandatory in nature and must be observed and complied with while filing
a suit against the DDA. It is further submitted that the only exception
under Section 53B of the DD Act is under Sub-section 3, however, the
suit of the appellant herein before the Trial Court did not fall within the
ambit of the exception under the provision. Therefore, the finding of the
Trial Court with respect to the Section 53B of the DD Act is legal, proper,
and in accordance with law as well as the facts of the case.
17. As regards the objections raised with respect to the third-party
interest in the suit land, it is submitted that the Management of M/s
Maharishi Ayurvedic Products gave a sum of ₹4.5 crores to the appellant
for becoming member of the Board of Directors and out of total 11
members who constituted the Board of Directors, 7 members were from
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M/s Maharishi Ayurvedic Products and constituted more than 2/3 of the
total constitution of the Board of Directors of the appellant Institute.
Accordingly, the transfer of management has been clearly established. It
is submitted that the drastic change in the internal constitution shows that
the funding was for the purpose of taking over the appellant institute and
change in ownership of its moveable and immoveable assets.
18. It is vehemently argued that the order passed by the Trial Court
while confirming the order of cancellation of the Lease Deed was in
consonance of law laid down as well as the conditions stipulated under
the Lease Deed. Therefore, since there is no illegality in the impugned
order and since there is nothing to show that the Trial Court has
committed any error while passing the impugned judgment, the instant
appeal may be dismissed for being devoid of merits.
19. Heard learned counsel for the parties and perused the record.
ANALYSIS AND FINDINGS
20. This Court has perused the contents of the impugned judgment
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dated 14 November 2011 and has also examined the objections on
record on behalf of the both the parties. Upon perusal, it is found that
there are two principal issues which have stemmed out of the controversy
between the parties, and which may be narrowed down to while
adjudicating the instant appeal, considering the findings of the Trial
Court, the contentions raised against the same by the appellant and the
objections thereto raised by the respondent. These issues that are to be
adjudged by this Court are as under:-
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I. Whether the suit before the Trial Court was liable to be
dismissed for the want of notice under Section 53B of the
DD Act.
II. Whether any substantive and conclusive evidence was
placed before the Trial Court to show that there was a
transfer of the suit property in favour of a third party,
thereby leading to the violation of condition II(5)(a) of the
Lease Deed.
III. Whether there is any other illegality, perversity, or error in
the impugned judgment.
ISSUE I
21. The issue framed by the Trial Court, which has been argued
comprehensively before this Court is qua the non-service of the notice
under Section 53B of the DD Act.
22. Section 53B of the DD Act provides for service of notice
pertaining to suits which is to be given to the DDA. The said provision
reads as under:-
“ Section 53B . Notice to be given of suits.—
(1) No suit shall be instituted against the Authority,
or any member thereof, or any of its officers or other
employees, or any person acting under the directions
of the Authority or any member or any officer or
other employee of the Authority in respect of any act
done or purporting to have been done in pursuance
of this Act or any rule or regulation made thereunder
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until the expiration of two months after notice in
writing has been, in the case of the Authority, left at
its office, and in any other case, delivered to, or left
at the office or place of abode of, the person to be
sued and unless such notice states explicitly the
cause of action, the nature of relief sought, the
amount of compensation claimed and the name and
place of residence of the intending plaintiff and
unless the plaint contains a statement that such
notice has been so left or delivered.
(2) No suit such as is described in sub-section (1)
shall, unless it is a suit for recovery of immovable
property or for a declaration of title thereto, be
instituted after the expiry of six months from the date
on which the cause of action arises.
(3) Nothing contained in sub-section (1) shall be
deemed to apply to a suit in which the only relief
claimed is an injunction of which the object would be
defeated by the giving of the notice or the
postponement of the institution of the suit.”
23. The provision under Section 53B of the DD Act specifies that no
suit shall be instituted against the Authority, or any of its member, unless
a notice of two months is served upon the DDA or the concerned
member. The Section also provides for the requisites of a notice to be
made under the provision and the Act, the non-compliance of which may
be deemed as non-service of notice. The provision also serves as a
challenge to the maintainability of a suit instituted against the DDA, and
in the instant appeal the same has been invoked.
24. The Trial Court has made the following judgments regarding the
issue noting the arguments on behalf of the parties:-
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“22. Admittedly the plaintiff has not issued any
notice under Section 53-B Delhi Development Act.
The counsel for the plaintiff emphatically argued that
there was not sufficient time between the issuance of
notice communicating cancellation of lease and the
date before which plaintiff was asked to handover the
possession, to serve two months notice required by
section 53-B Delhi Development Act. Thus, the
plaintiff had no option but to file the suit without
giving notice. In support of this submission he relied
upon D.P. Rai Ahuja vs. Delhi Development
Authority 1974 RLR 664 to make out that notice
under Section 53-B is not required if relief is one for
injunction object of which would be defeated by
giving notice or postponement of institution of suit.
He also relied upon Durga Chand Kaushish vs.
Union of India ILR 1971, 2 Delhi 350 in which it was
held that if act or subject matter of the suit is not in
pursuance of the Act, no notice is required. In State
of Punjab vs. M/s Geeta Iron Brass Works Ltd. AIR
1978 Supreme Court 1608 it was held that statutory
notice under Section 80 CPC has become ritual
because administration is often unresponsive and
hardly lives up to parliament sexpectation in
continuing section 80 CPC despite Law
Commission's recommendations for its deletion.
23. The counsel for defendant refuted the arguments
and submitted that section 53-B is mandatory m
nature and admits off no exception. The same is
perimeteria with Sectin 80 CPC but Section 80 CPC
was amended in 1976 to introduce seeking of
exemption from Court from serving notice, if relief
claimed is urgent purpose of which would be
defeated by postponing the institution of suit. But no
such amendment has been incorporated in Section
53-B Delhi Development Act. This means that
Legislature did not want to bring such an exemption
in Delhi Development Act.
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25. After considering the rival submissions, I am of
the considered opinion that arguments of counsel f 0t
the defendants are more well founded. So long as a
provision exists on the Statute it must be observed
instead of being ignored. The difficulty in complying
with the provision is no answer and no ground for
non compliance. When the Legislature has purposely
retained the provisions in its wisdom, the Court
cannot dispense with the same. The act of the
defendant in cancellation of lease cannot be said to
be beyond the purview of the Act. It may be legal or
illegal but it is within the power of the lessor to do
so. Power to take a decision includes power to take
wrong decision also. The plaintiff cannot take upon
itself the task of deciding whether the action of the
defendant is legal or not.
26. In view of the above discussion, the issue is
decided against the plaintiff and in favour of the
defendant.”
25. The Trial Court while making the observations in favour of the
respondents, defendants therein, observed that mere difficulty to comply
with a provision would not permit the appellant to entirely dispense with
the service of the notice. It further noted that due to non-service of the
notice the appellant assumed that the decision of the respondent of
cancellation of the Lease Deed was erroneous and hence, bypassing the
provision, he approached the Trial Court without serving the notice.
26. A Division Bench of this Court in Yashod Kumari vs. MCD , 2003
SCC OnLine Del 101 , made observations qua the nature and mandate of
notice under Section 53B of the DD Act and held as is reproduced
hereunder:-
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“ 11. Apart from this, we find that the appellant's suit
was already registered by the Court first and ex
parte interim order was also passed in this. It was
thereafter transferred to District Court alongwith the
application for grant of leave. From this it could also
be easily presumed that the Court had impliedly
granted the leave to institute the suit or that the
notice stood waived in the facts and circumstances of
the case. The aspect seems to have gone totally
unnoticed with Trial Court proceedings
mechanically; in the matter to dismiss the suit for
want of notice under Section 80, CPC.
13. It is true that Section 53-B of DDA Act does not
carry a provision analogous to the provisions of
Section 80(2) to provide for grant of leave in filing
the suit without service of two months notice. But it
also contains a proviso in Sub-section (3) which
makes the embargo contained in Sub-section (1)
inapplicable in a suit in which relief claimed is that
of injunction only.
14 . But this apart, taking in regard that this Court
had registered the suit and granted the stay order
and that respondents had contested it all though,
even notice under Section 53-B should be deemed
waived in the facts and circumstances of the case.
After all the purpose of notice under Section 53-B of
DDA Act is the same as that of Section 80, CPC i.e.
to bring the claim to the authority's notice so that it
may concede or contest it. Once the authority had
contested it on merits even at preliminary stage, it
could not complain of non-service of notice under
Section 53-B now. Nor could it be held fatal to justify
the dismissal of the suit.”
27. A Coordinate Bench of this Court in Delhi Development Authority
vs. Ashok Kumar, 2016 SCC OnLine Del 5738, while adjudicating upon
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a similar question while referring to the findings of the Court in Yashoda
Kumari (supra) observed as under:-
“ 7. Learned counsel for the appellant argued that the
suit was bad for want of notice to the
appellant/defendant under Section 53B of the Delhi
Development Act, 1957, however, this issue is
squarely covered against the appellant/defendant by
a Division Bench judgment of this Court in the case
Yashod Kumari v. MCD, AIR 2004 Delhi 225 and in
which judgment it is held that the object of giving
notices prior to the filing of the suit is to ensure a
settlement before filing of suit, but, once the suit is
contested to the hilt, the requirement of the prior
notice pales into insignificance.”
28. Further, the Division Bench of this Court in DCM Ltd. vs. DDA ,
2009 SCC OnLine Del 1675, while discussing the principle observed as
under:-
“ 20. The next contention of the appellant's counsel is
that even if it is assumed that Section 53-B was
applicable, nevertheless, no notice under Section 53-
B of the Delhi Development Act was necessary under
the circumstances because the DDA had complete
knowledge of the appellant's claim in respect of the
suit premises and, therefore, no useful purpose would
have been served by issuing the
requisite notice under Section 53-B. In support, he
has referred to a decision of this Court in Nehru
Place Hotels v. DDA etc. 1991 Rajdhani Law
Reporter 389. There, it was held by a Single Judge of
this Court that in a case where notice is issued to
the DDA on a writ petition filed by a party, and that
writ petition is thereafter withdrawn with permission
to institute a suit against the DDA instead,
the DDA cannot oppose the suit for lack of
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statutory notice as required by Section 53-B because
all the requirements of the notice are contained in
the earlier writ petition instituted by the party, and
on service of notice in that writ petition, the
defendant DDA was fully aware of the plaintiff's
claim. In arriving at its conclusion, the Court relied
upon a decision of the Madras High Court in N.
Parameswara v. State, AIR 1986 Mad 126 where that
Court had held that after the dismissal of a writ
petition with permission to the petitioner to seek his
remedy by way of a suit, the plaintiff was not
required to serve a notice under Section 80 of the
Civil Procedure Code before filing that suit since
the notice served in the writ petition amounted to
sufficient compliance of Section 80 CPC. In this
context, the Court also held, inter alia, in para 23 as
follows:
“After all the purpose of
giving notice under Section 80 of the CPC or
under Section 53-B of the Act is to enable the
authorities to examine the claim of the person
giving the notice so that the authorities could
settle the said claim without the said person
being made to institute legal proceedings. In
the State Bank of Patiala v. M/s Geeta Iron &
Brass Works Ltd., (1978) 1 SCC 68 : AIR 1978
SC 1608, it was held that a statutory notice of
the proposed action under Section 80 of the
CPC is intended to alert a State to negotiate a
just settlement or at least for the courtesy to
tell the potential suitor as to why the claim is
being resisted. In Ghanshyam
Dass v. Dominion of India, (1984) 3 SCC
46 : AIR 1984 SC 1004, it was observed by the
Supreme Court that the point to be considered
is whether a notice gives sufficient information
as to the nature of the claim such as would
enable the recipient to avert the litigation.”
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21. Similarly, in the case of Yashod
Kumari v. MCD, (2004) 111 DLT 33, a Division
Bench of this Court has held that the object of
a notice under Section 53-B of the Delhi
Development Act, 1957 is the same as that
of Section 80 of CPC; which is to bring the plaintiff's
claim to the notice of the Authority so that it may
make up its mind whether to concede the claim or to
contest it. In that matter, the provisions of
both Sections 80 CPC as well as Section 53-B of the
Delhi Development Act, 1957 came up for
consideration. The plaintiffs contended that since no
objection had been taken to the non-issuance of the
requisite notice under Section 80 CPC by the
defendants, and since the suit had proceeded and an
ad interim injunction had also been granted,
therefore, the requirement of notice under Section 80
CPC be deemed to be waived. It was also prayed that
under the circumstances, leave may be granted
under Section 80(2) of the CPC to institute the suit
without service of requisite notice. The Court held
that the object of a notice under Section 80 is to
afford the government an opportunity to examine the
nature of the claim and if it thinks fit to settle the
claim and to avoid unnecessary litigation. On the
facts, the court held that the plaintiffs' application
under Section 80(2) CPC praying for leave to
institute the suit without
issuing notice under Section 80 CPC ought to have
been disposed of by the trial court. At the same time,
the court also held that in view of the fact that the
suit had already been registered, and an ex-parte
interim order was passed in the suit, it can be
presumed that the court had impliedly granted leave
to institute that suit or that
the notice stood waived on the facts and
circumstances of the case. As regards, the non-
issuance of notice under Section 53-B of the Delhi
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Development Act, the Court held that although it is
true that Section 53-B of the Delhi Development Act
does not have any provision analogous
to Section 80(2) of CPC, however, since the Court
had registered the suit and granted stay, and the
respondents had contested it all
through, notice under Section 53-B should be
deemed to be waived for the reason that the purpose
of notice both under Section 53-B of the Delhi
Development Act as well as under Section 80 of CPC
is the same, which is, to bring the claim to
the notice of the Authority concerned so that it may
either contest it or concede the same. It felt that once
the authority concerned had contested the matter on
merits even at a preliminary stage, it could not
complain of non-service of notice under Section 53-B
thereafter.
22. This decision has also been noticed by another
Division Bench of this Court in Smt. Prinda
Punchi v. Municipal Corporation of Delhi, (2005) 4
Apex Decisions (Delhi) 639 cited by learned counsel
for the respondent for the proposition that since
there is no provision under the Delhi Development
Act akin to Section 80(2) of the CPC for leave of the
Court to bring a suit without prior notice, therefore,
the appellant could not have filed the instant suit
against the DDA without giving the notice required
under Section 53-B of the Delhi Development Act. In
paragraph 26 of the said decision, the Division
Bench has sought to distinguish the aforesaid
decision in Yashod Kumari's case (supra), inter alia,
on the ground that in Smt. Prinda Punchi's case, the
defendants had raised a specific objection with
regard to the want of statutory notice and a
preliminary issue to that effect was also framed by
the trial court, consequently, there could be no plea
of waiver of notice. It, therefore, held that,
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“In the facts of the present case it cannot be
said that there could be waiver of any
such notice as provided for under section 53-B
of the Delhi Development Act. Objection was
taken and issue was framed thereon.”
23. In the instant case, on the facts we find that the
respondent defendant had duly filed its written
statement in the suit without raising any objection to
the maintainability of the plaint due to the absence of
the requisite notice contemplated under Section 53-B
of the Delhi Development Act. Furthermore, this
written statement only came to be filed after
rd
23 March, 1992 when the interim orders staying
dispossession were made absolute. Thereafter, the
respondent moved an application under Order 7 Rule
11 of the Code of Civil Procedure praying that the
plaint be rejected on the ground of non-compliance
of Section 53-B. In reply, the appellant took the stand
that since no such plea had been raised by the
respondent in its written statement, it should be
presumed that the respondent had waived the
requirement of notice under Section 53-B.”
29. In Karamvir Singh vs. DDA, 2008 SCC OnLine Del 333, a
Coordinate Bench of this Court made findings with respect to Section
53B of the DD Act and held that where there was knowledge of
proceedings or grievance of against the Authority, there did not remain
question of notice under Section 53B of the DD Act. In the instant matter,
prior to reaching the Trial Court, J.C. Khosla had already obtained an
interim order in his favour, restraining the appellant herein to dispose of
the premises in question. It was not the issue at that time that the notice
under Section 53B of the DD Act was not issued and the respondent
herein, DDA was also a party to the said suit.
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30. The position was reiterated by a Coordinate Bench of this Court in
I.P. Power Generation Company Ltd. vs. Siddhartha Extension
Resident Welfare Association & Ors ., 2013 SCC OnLine Del 4956,
wherein the following was observed:-
“ 28. I am afraid, the judgment in DCM Ltd. cited by
the counsel for respondent/defendant No. 1 has been
overruled in DCM
Ltd. v. DDA MANU/DE/0728/2009 (DB). The other
judgments cited by the counsel for the
appellant/plaintiff hold that the right under the said
provision is capable of being waived or that the suit
cannot be dismissed on such technical ground after it
has been contested and
that notice under Section 53B is not required when
there is earlier litigation between the parties.”
31. The interpretation as made by the predecessors of this Court,
including the Coordinate Benches as well as the Division Bench clarify
the position with respect to notice under Section 53B of DD Act and
provides that the intention and object of the provision is to intimate the
Authority and bring to its knowledge that a suit may be filed against it so
that if remediable, the matter does not see the day of light in the Court of
law and is resolved/settled at the pre-litigation stage.
32. Upon perusal of the provision as well as the interpretation attached
by this Court, it is found that once the claim culminated into a litigation
and reached any forum or any Court of law, requirement of the prior
notice befalls to be insignificant. A dismissal on the ground of non-
service after the Authority had contested the matter for over 10 years on
merits of the case and after a comprehensive and elaborate proceedings
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on merits, facts and circumstances, considering the material on record as
well as the evidence adduced including examination and cross-
examination of parties and witnesses and after deploying judicial
machinery to the matter, would not only be in contravention of the
intention and nature of the provision but would also not meet the ends of
justice. In the instant matter, there is no doubt that before the suit reached
the Trial Court, amongst the same parties an interim order was also
passed by the Coordinate Bench of this Court. Therefore, it is also not the
issue that the respondent did not have the knowledge of the suit filed and
injunction passed in relation to the premises/land in question, which is
admittedly a DDA plot leased to the appellant. The prior knowledge of
the Authority that a suit has been filed or a claim has been raised against
it, would not invoke the bar to maintainability under Section 53B of the
DD Act.
33. The relevant contents of the said termination of Lease Deed and
th
vacation order dated 7 December 1995 are reproduced hereunder:-
“WHEREAS show cause notice dated 11.1.1995 was
served upon the lessee to explained with the Lease of
entire plot may not be determined for the aforesaid
breach.
Further, the reply of your Society dated 11.1.95 has
been examined by the lessor and is not found
satisfactory. Hence it has been decided to determine
the lease of above referred plot allotted to your
Society by the Lessor.
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You are therefore; requested to please hand over the
land back to our Asstt. Engineer (IL) on or before
18.12.95.”
34. It is the case of the appellant that since it was seeking injunction
against the Authority and the time prescribed by the Authority for
vacating the premises was a period of 10 days, there was no scope for
service of notice under Section 53B of the DD Act, which necessitates
two months‟ notice alongwith all the relevant and requisite details.
Admittedly, the order of the respondent directing the appellant to vacate
the premises in question within 10 days, was passed and communicated to
th
the appellant on 7 December 1995, pursuant to the finding that the reply
th th
dated 17 January 1995 to the Show Cause Notice dated 11 January
1995 was found to be unsatisfactory. A bare reading of Sub-section 3 of
the Section 53B of the DD Act, reveals that the legislature, while drafting
the Act, intended to accommodate the persons seeking injunction and
immediate relief against the act purported to be done by the DDA or any
of its members. If the intention of the legislature is not given effect, the
operation of the Act itself and the provisions thereunder may fall flat on
its face in fulfilling the objective of Act. Similarly, in the case of the
appellant, it was seeking injunction against the respondent from eviction
from the subject land and hence, the relief sought was urgent and
immediate. A service of notice of two months would have changed the
entire course of the proceedings between the parties and would have even
defeated the purpose of the suit. Therefore, this Court finds force in the
argument advanced on behalf of the appellant.
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35. Accordingly, with respect to the Issue I, it is found that the Trial
Court failed to appreciate the intention of the legislature and the spirit of
the provision under Section 53B of the DD Act as well as the
interpretation attached to the provision by the various benches of this
Court.
ISSUE II
36. While Issue I pertained to an issue of maintainability of the suit,
the Issue II related wholly to the merits of the case.
37. It has been argued, extensively, on behalf of the respondent, that
the appellant had parted with the title and ownership of the appellant
Institute by transferring the same in the name of a third party and had
thereby violated the terms of the Lease Deed. On the other hand, the
appellant had submitted that the respondent had failed to establish before
the Trial Court that there was a transfer of ownership to the third party
and despite the same the Trial Court had recorded a finding against the
appellant and in favour of the respondent.
38. The Trial Court, while adjudicating this question made the
observations which are reproduced hereunder:-
“ 28. The counsel for the plaintiff strongly argued
that there is no conveyance document to show that
the plaintiff transferred the land to a third party. To
that extent he is correct. The Court cannot lose sight
of a fact that the violators of law are always a leg
ahead the framers of law. They always take sufficient
care to avoid detection of wrong acts done by them.
Most of the properties are transferred by way of
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Agreement to Sell, GPA, Will which are indirect
methods of transferring the property. The superior
lessor such as DDA is not a party to the transaction
and cannot be expected to possess the documents of
transfer of title. The same has to be gathered from
the facts and circumstances. Viewed from that angle
the plaint read as a whole gives sufficient impression
that the plaintiff has virtually admitted that it
transferred the premises. The case set up by the
plaintiff that it was running in financial crises was
not able to repay the loan taken from financial
institution, decided to set up an Ayurvedic set up of
medicines all show that the plaintiff practically
transferred the property. The advertisement for sale
published in newspaper is another indication of the
said transfer. Affidavit of Sh. Subhash Gupta,
property agent is the other circumstance to show the
transfer. Reply of Income Tax Department that there
was transaction of sale of the property for
consideration of Rs.4.5 Crores as alleged by the
brokers and other circumstantial evidence reflected
in document Ex.DW1/6 is yet another act in the
series to show the transfer. The plea of the plaintiff
that there could be post facto permission for transfer
of payment on 50% unearned increase is yet another
half hearted admission on the part of plaintiff to
show that property has been transferred. Last but not
the least is the step taken by the plaintiff to
compound the matter with the defendant after filing
of the suit. Now once that request for compounding
has been declined by the defendant, plaintiff cannot
take a round tum and say that there was no transfer.
31. There is substantial identity between Maharashi
Vidya Mandir Society and Maharashi Ayurvedic
Arogyashala. The signboard of Maharashi
Arogyashala was found displayed at the spot. The
same lends support to the claim of the defendant that
a third person has come in existence and the
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property has been transferred to him. That is how the
signboard of that third person was found at the spot.
The plaintiff did not dare to deny the existence of that
third person or the inspection or the displaying of
signboard of that third person. He has simply tried to
make out that it was a case of transfer of
management. For that it has not brought on record
the details of management of the Maharashi
Ayuvedic Arogyashala. If said society is an
independent society registered separately, it has its
own identity. Simply because the management of the
two is somewhat common, it does not mean that the
two societies are one and same.
34. Another reliance on Rama Association Pvt. Ltd.
vs. DDA 45(1991) DLT 630 is equally unfounded.
There the question was whether change in share
holding of a company directors amounts to sub-
letting. Moreover in that case injunction was granted
before termination of the lease whereas in the case in
hand the lease has already been terminated before
the filing of the suit.
35. To sum up the issue is decided against the
plaintiff and in favour of the defendant.”
39. It is, therefore, evident that to decide the issue in question, the Trial
Court relied upon the affidavit of one Subash Gupta, examined as Ex.
DW 1/4, and arrived at the conclusion that there was a newspaper
advertisement which showed that the appellant had put up the Institute for
sale that signboard of and that as per the reply of Income Tax Department
that there was transaction of sale of the property for consideration of
Rs.4.5 Crores.
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40. The respondent had relied upon the affidavit of one Subash Gupta,
property agent, whose affidavit was placed on record which stated that
the third party, i.e. Maharishi Vidya Mandir was operating from the
premises in question. The said person was admittedly not an Official
appointed for inspection at the premises, neither appointed by the Court,
nor with the consent of both the parties to inspect the property in question
and give a finding to that effect. Moreover, the contents of the affidavit
were never verified by the respondent/DDA which is also evident from
the testament of the DDA witness, Mohan Lal Ranga, Assistant Director,
Institutional Land, DDA, which is reproduced hereunder:-
“We had never called MR. Subhash Gupta in regard
to the affidavit given by him. We had not made any
inquiries from MR. Subhash Gupta in regard to his
affidavit. The complaint was filed by Sh. J.C. Khosla
which was supported by affidavit of Sh. Subhash
Gupta. We have never supplied copy of this affidavit
to the plaintiff. We had not given a copy of complaint
from Mr. J.C. Khosla to the plaintiff society.”
41. Therefore, without the verification of the contents of the affidavit
as well as the legitimacy/competency of the witness, the affidavit in
question could not have been one of the primary grounds for deciding the
issue in favour of the respondent.
42. The second ground for deciding the issue was the advertisement
issued for sale of the appellant institute, however, there is no dispute to
the fact that a mere offer to sale does not imply a sale of the property and
its transfer to a third party thereof. The principle, which has also been
discussed in the landmark judgments of Carlill vs. Carbolic Smoke Ball
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Company, [1893] 1 QB 256 and Partridge vs. Crittenden, [1968] 2 All
ER 421, and has also been discussed widely in the law of contract, is that
an advertisement, is an invitation to offer and not implied sale. In the
instant case, the advertisement which has been relied upon by the
respondent before the Trial Court could not have been said to be a proof
of sale or transfer of the appellant Institute. This Court does not agree
with the findings of the Trial Court to this respect and finds that mere
advertisement did not conclusively prove that the transfer was actually
completed in favour of a third party.
43. Another consideration before the Trial Court was whether the
appellant had transferred the property in name of the third party for a
consideration of ₹4.5 cr. It has been contented by the appellant, that the
appellant institute was not able to sustain itself and its complete operation
thereof due to financial crunch and constraints. Thereafter, by inducting
concerned persons, Ajay Prakash and Anand Prakash, the new wing of
Ayurveda medicines and treatment was introduced to the appellant
institute to not only facilitate the financial constraints faced by the
institute but also to set up a new field of medicine in the appellant
hospital so as to provide a better infrastructure and medical facilities to
the public at large. On this aspect, an observation which is imperative to
be seen is that the Trial Court itself noted that there is no conveyance
deed or even any other document, including document of agreement to
sale, title or ownership deeds, to show that the appellant institute had
been transferred in the name of the third party. The entire observations of
the Trial Court in the impugned judgment passed and the submissions and
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contentions of the respondents were not substantiated by any title or
ownership document to conclusive establish that there was a transfer of
the suit property by the appellant to the third party.
44. Another contention which has been raised by the respondent before
this Court, is that the management was internally altered to accommodate
the transfer of institute when the third party, i.e., Maharishi Ayurved
rd
Mandir was given 2/3 share in the management. However, the Trial
Court has not made any observation to this contention raised by the
respondent before this Court. Hence, a fresh plea before this Court which
has not been raised before the Trial Court and has not been adjudicated
upon by the said Court, cannot be looked into by this Court at this stage.
45. Keeping in view, the aforesaid consideration, this Court does not
find reason in the finding of the Trial Court that the subject land and the
appellant Institute had been transferred in the favour of the third party.
The Trial Court while deciding the issue while coming to the conclusion
that the property and management of the appellant Institute was
transferred to a third party, passed certain vague observations, which are
reproduced hereunder, and were not substantiated by any conclusive
evidence, by way of any document of title or conveyance deed etc. to
show that the transfer was made in the favour of a third party:
“The counsel for the plaintiff strongly argued that
there is no conveyance document to show that the
plaintiff transferred the land to a third party. To that
extent he is correct. The Court cannot lose sight of a
fact that the violators of law are always a leg ahead
the framers of law. They always take sufficient care to
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avoid detection of wrong acts done by them. Most of
the properties are transferred by way of Agreement to
Sell, GPA, Will which are indirect methods of
transferring the property. The superior lessor such as
DDA is not a party to the transaction and cannot be
expected to possess the documents of transfer of title.
The same has to be gathered from the facts and
circumstances.”
ISSUE III
th
46. The order/notice dated 7 December 1995 was served upon the
appellant thereby cancelling their Lease Deed and directing them to
vacate the premises in question. The relevant terms of the Lease Deed are
stated under:-
“(5)(a) The Lessee shall not sell, transfer, assign or
otherwise part with possession of the whole or any
part of the said land or any building thereon except
with the previous consent in writing of the lessor
which he shall be entitled to refuse in his absolute
discretion.”
47. The aforesaid clause stipulated that the lessee shall not transfer the
possession of the land in favour of a third party. This clause became the
th
primary ground for cancellation of the Lease Deed in the order dated 7
December 1995.
48. The relevant portion of the said order is reproduced hereunder:-
“AND WHEREAS under clause II (5) (a) of the
Lease Deed in respect of Leased land, the lessee
shall not sell, transfer assign or otherwise part with
the possession of the whole of any part of the said
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land or any building thereon except with the previous
consent in writing of the Lessor (DDA).
AND WHEREAS it has come to notice that you have
sold out/ transferred the plot together with building
standing thereon to another body/entity, namely
„Maharishi Ayurved‟ without the prior consent of the
Lessor.
AND WHEREAS for the breach of the said clause II
(5) (a) of the Lease Deeds, the Lessee of the said
land had become liable to be determined in terms of
Clause III of the said Lease Deed.
WHEREAS show cause notice dated 11.1.1995 was
served upon the lessee to explained with the Lease of
entire plot may not be determined for the aforesaid
breach.
Further, the reply of your Society dated 11.1.95 has
been examined by the lessor and is not found
satisfactory. Hence it has been decided to determine
the lease of above referred plot allotted to your
Society by the Lessor.
You are therefore; requested to please hand over the
land back to our Asstt. Engineer (IL) on or before
18.12.95.”
49. A perusal of the said notice cancelling the Lease Deed of the
appellant reveals that the principal ground that the property in question
was transferred to a third party which led to the violation of the condition
of Lease Deed. However, as found earlier, the findings of the Trial Court
qua the transfer of property were erroneous and not in accordance with
the principles of law as well as the facts and circumstances of the case.
Therefore, when the sole ground invoked has already been negated by
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this Court, the question of violation of terms of the Lease Deed is not
held to be proved and remained unsubstantiated.
50. Hence, in the absence of evidence substantiating that the terms of
the Lease Deed were violated, the basis for cancellation in the notice
th
dated 7 December 2011 did not survive.
CONCLUSION
51. Keeping in view the material on record, contentions raised in the
pleadings, arguments advanced on behalf of the parties, facts and
circumstances of the case, as well as the discussion in the foregoing
paragraphs, this Court is of the opinion that the Trial Court has erred
while passing the impugned order on the following counts:-
Firstly , the Trial Court failed to appreciate the intention of the
legislature and the spirit of the provision under Section 53B of the
DD Act as well as the interpretation attached to the provision by
the various benches of this Court, according to which once the suit
had been instituted, reached the Court of law, argued on merits
comprehensively for over a decade then the notice under Section
53B of the DD Act is rendered insignificant and irrelevant. The
dismissal of the suit on this ground was unfounded and erroneous.
Secondly , the Trial Court also failed to consider that there was no
conclusive evidence or document on record to establish that the
title and ownership of the appellant Institute was transferred to a
third party, since:
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a. there was neither any conveyance deed, title deed or
any other document to show that the property, land or
the institute was transferred;
b. mere advertisement did not imply that a sale was
concluded by the appellant;
c. and, affidavit of the property agent, Subhash Gupta,
was not verified at the time of examination of
evidence.
52. It is travesty of justice that an institution contributing for noble
cause being that of running a charitable hospital on a public land and
providing for sound research and treatment facilities has been made to
suffer the rigors of cancellation of the Lease Deed and vacation of the
property. Law that should be an instrument for ensuring welfare is being
reduced to a tool of atrocity in the instant case. Being a constitutional
court and the conscience-keeper of the democracy, this Court cannot lend
a blind eye when the ends of justice are being bulldozed in broad
daylight. The institution is imparting the state‟s welfare functions and
should otherwise be done by the instrumentalities of state. Even in such a
case, undue harassment being caused to the appellant will lead to an
anathema of the rule of law.
53. Therefore, this Court, in light of the observations made above finds
that the instant case has sufficient merits to be allowed and therefore, in
terms of the following directions, the instant appeal and the reliefs sought
there are allowed in the following terms:
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th
a. The judgment dated 14 November 2011 passed by the
Court of District Judge and Additional Sessions Judge,
ARCT, Delhi is set aside.
th
b. The Order dated 7 December 1995, cancelling/terminating
the Lease Deed of the appellant Institute is also set aside,
since the finding of the concerned authority was not
supported or substantiated by any conclusive document.
54. With the aforesaid directions, the instant appeal is allowed.
55. Pending applications, if any, also stand disposed of.
56. The judgment be uploaded on the website forthwith.
(CHANDRA DHARI SINGH)
JUDGE
DECEMBER 1, 2022
dy/ms
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