Finality of civil court decrees on title precludes re-adjudication of ownership during administrative layout scrutiny.

The dispute concerns 1600 sq. yards of land in Yusuf Sarai Jat (Green Park Extension), New Delhi

Originally owned by a private colonizer, the land was surrendered to the Municipal Corporation of Delhi (MCD) under a 1958 layout plan for a High School.

However, in 1969, the MCD sanctioned a revised layout plan de-reserving the land because the 1600 sq. yard area was insufficient for the mandatory 4000 sq. meter school requirement

The colonizer subsequently sold the land to five individuals in 1975

In 1988, a civil court granted a perpetual injunction in favor of the owners, restraining the MCD from interfering with possession except through due process; this decree attained finality after the MCD's appeals were dismissed in 1992

The Appellants, subsequent purchasers, applied for the incorporation of their plots into the colony's layout plan

The MCD’s Layout Scrutiny Committee (LOSC) and Standing Committee rejected the application in 2014, citing an entry in the MCD’s immovable property register

A Learned Single Judge of the High Court set aside these rejections, but the Division Bench reversed that decision, questioning the Appellants' title and asserting the MCD's role as a "custodian" of public interest

The Court emphasized that a mere entry in a local body's internal immovable property register does not constitute legal proof of title

It applied the principle that while a municipal corporation may act as a custodian of public interest to manage specific areas, this custodial right does not equate to ownership or the right to compel the transfer of property to itself

The Court further relied on the doctrine of finality of judicial proceedings, noting that findings of a civil court regarding possession and ownership, once affirmed through the appellate process, cannot be unilaterally unsettled in collateral proceedings

The Supreme Court observed that the Appellants and their predecessors had remained in peaceful possession for decades, supported by registered sale deeds and a 1988 civil decree that the MCD failed to successfully appeal

The Court found that the Division Bench erred by suo motu delving into the question of title, which was not the subject matter of the writ petition

The Court noted a contradiction in the Division Bench's reasoning: it admitted the land did not belong to the SDMC, yet characterized the SDMC as a "custodian" to deny the Appellants' residential use

Since the land was formally de-reserved from school use in 1969 due to size constraints, the "public purpose" justification had ceased to exist

The Court held that the SDMC could not assert ownership based solely on a property register entry, especially when the MCD itself had previously admitted in other proceedings that the land was owned by private parties

It held that the Division Bench's observations regarding title and public purpose were perverse and unsupported by evidence

The Court restored the judgment of the Learned Single Judge, directing the Respondent-Corporation to consider the Appellants’ application for incorporation of the plots into the layout plan within 60 days via a speaking order, independent of the Division Bench's overturned observations