Delhi High Court | Cancellation of lease deed of Institution running a charitable hospital on public land a travesty of justice

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. 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.

Delhi High Court

Delhi High Court: In a regular first appeal filed under Section 96 read with Order XLI of the Civil Procedure Code seeking to set aside the order and judgment dated 14-11-2011 passed by District Judge-cum ASJ – Incharge (West) / ARCT Delhi, Chandra Dhari Singh, J., allowed the appeal and set aside the judgment dated 14-11-2011 passed by the Court of District Judge and Additional Sessions Judge, ARCT, Delhi and the order dated 07-12-1995, canceling /terminating the Lease Deed of the appellant Institute.

The appellant is a Society ‘Khosla Medical Institute’ which is formed by the two brothers J.C. Khosla and K.C. Khosla with the objective of establishing, managing, and running a Medical Research Centre, whereby, a lease deed was registered between the appellant and the respondent, i.e., the Delhi Development Authority (“DDA”), for allotting plots. After some time, the relationship between the brothers started to strain, and a complaint came to be filed before the Income Tax Authorities alleging that the appellant Institute had transferred the property to third parties by inducting them as new members of the Institute.

The Delhi Development Authority i.e., Respondent 1, issued a show cause notice to the appellants asking for reasons for the complaint and on finding the reply to the notice unsatisfactory, canceled the lease deed and directed them to vacate the premises. The appellant thereby filed a suit seeking a permanent injunction and setting aside the order terminating the lease deed, which was thereby rejected. Aggrieved by the same, the present appeal was filed.

The issues under consideration are as follows:

I. Whether the suit before the Trial Court was liable to be dismissed for the want of notice under Section 53-B of the DD Act?

The Court noted that Section 53-B of the Delhi Development Act, 1957 (DD Act) provides for service of notice pertaining to suits which is to be given to the DDA and in the instant case, prior to reaching the Trial Court, J.C. Khosla had already obtained an interim order in his favour, restraining the appellant to dispose of the premises in question. It was not the issue at that time that the notice under Section 53-B of the DD Act was not issued and the respondent herein, DDA was also a party to the said suit.

The Court remarked that A dismissal on the ground of non-service after the Authority had contested the matter for over 10 years on the merits of the case and after comprehensive and elaborate proceedings 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.

Placing reliance on DCM Ltd. v. DDA, 2009 SCC OnLine Del 1675, the Court further noted that a bare reading of Section 53-B(3) of the DD Act, reveals that the legislature while drafting the Act, intended to accommodate the persons seeking an 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 the Act.

The Court held that the Trial Court failed to appreciate the intention of the legislature and the spirit of the provision under Section 53-B of the DD Act as well as the interpretation attached to the provision by the various benches of this Court.

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?

The Court noted that the Trial Court relied upon the affidavit of Subash Gupta to conclude that there was a newspaper advertisement that showed that the appellant had put up the Institute for sale. It was recorded that the contents of the affidavit were never verified by the respondent/DDA, and therefore, the legitimacy/competency of the witness, the affidavit in question could not have been a ground for deciding the issue in favor of the respondent.

Placing reliance on Carlill v. Carbolic Smoke Ball Company, [1893] 1 QB 256 and Partridge v. Crittenden, [1968] 2 All ER 421, the Court stated that an advertisement is an invitation to offer and not an implied sale. Thus, the findings of the Trial Court in this respect did not conclusively prove that the transfer was completed in favor of a third party as the Trial Court itself noted that there is no conveyance deed or even any other document, including document of an agreement to sale, title or ownership deeds, to show that the appellant institute had been transferred in the name of the third party.

III. Whether there is any other illegality, perversity, or error in the impugned judgment?

Thus, the Court held that 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.

[Khosla Medical Institute v. Delhi Development Authority, 2022 SCC OnLine Del 4199, decided on 01-12-2022]

Judgment by: Justice Chandra Dhari Singh

Advocates who appeared in this case:

Mr. Arvind Varma, Sr. Advocate with Ms. Iti Sharma and Mr. Puneet Sharma, Advocates for the Appellant;

Ms. Shobhana Takiar, Standing Counsel for the DDA.

*Arunima Bose, Editorial Assistant has reported this brief.

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