Delhi High Court: Dealing with the long-pending issue of DDA leasehold to freehold conversion policy, the Division Bench of Prathiba M. Singh* and Vikas Mahajan, JJ., noted that there were a large number of pending applications for which conversion charges had already been collected, however, they were not being processed because the portal had been shut down. Thus, the Court stated that any fresh policy would ordinarily have to be prospective, and that all pending paid applications must be dealt with as per the policy prevailing when the applications were filed.
Background
The case arose from the DDA’s decision to take down its portal for conversion of immovable properties from leasehold to freehold since February 2026, which led to all applications being kept on hold. This affected a large number of property owners who had already applied and, in many cases, already paid the charges. The Court noted that there were 1373 pending applications and Rs. 155.06 crores had already been collected by DDA.
On the last date of hearing, the Court had directed a meeting between the Secretary, Department of Capital Development, MoHUA, the DDA and other ministries and authorities concerned. The minutes of the meeting dated 14 August, 2026 showed that the administration was still discussing simplification of documentation, simplification of the conversion process and a holistic revisit of the conversion charges structure but had taken no final substantive decision. The minutes also recorded that the DDA’s conversion policy had been kept on hold and under review, to rationalise and simplify it, though this did not restrain leaseholders from transferring, gifting, inheriting or mortgaging their properties as per the established procedure. It was further recorded that the lessee could apply to DDA for transferring their properties.
Issues
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Whether the DDA and other authorities could continue to keep conversion applications on hold indefinitely.
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Whether any revised conversion policy could be applied retrospectively to pending applications where charges had already been paid.
Analysis
The Court first asked the counsels for DDA and MoHUA whether any new policy could apply retrospectively. The answer given was that such a policy would usually have to be prospective in nature, though exceptions might exist.
The property owners relied on Neera Sharma v. Delhi Development Authority, W.P.(C) 5180 of 2012, in which the Court held that where the applicant had deposited the charges along with the application, there was no legal basis for DDA to charge a higher rate merely because the rates had changed before permission was granted. It was also noted that DDA had not pointed to any rule or regulation showing that CLU charges at the rates prevalent on the date of grant of permission would apply, and it added that, in such cases, it is the applicant and not DDA who suffers because the applicant’s money remains with DDA while the applicant is unable to use the land.
The Court agreed with the above reasoning and held that any policy now announced would have to be prospective in nature. The Court also noted that there were a large number of pending applications for which conversion charges had already been collected, however, they were not being processed because the portal had been shut down. In that background, the Court made it clear that all past applications for which payment had been received would have to be processed as per the policy prevalent at the relevant point in time.
The Court found that the minutes of the meeting did not show a real final policy and on the contrary, it showed that there was still no clarity on documentation or conversion charges. The Court also noted that even the basic mechanism for transfer of leasehold properties had not been explained properly.
Decision
The Court held that any policy now announced would be prospective, and that all pending past applications in which payments had already been received must be processed according to the policy in force at the relevant time.
The Court granted a last and final opportunity to MoHUA, DDA, and L&DO to place their final policy on record at least three days before the next date of hearing. The matter is listed on 28 September, 2026 and is directed to be treated as a part-heard matter.
[DDA v. Mala Sahni Seth, 2026 SCC OnLine Del 7108, decided on 7-9-2026]
*Judgment delivered by: Justice Prathiba M. Singh
Advocates who appeared in this case:
For Appellant: Ms. Mrinalini Sen, Standing Counsel for DDA, Ms. Gauri Rajput, Advs.
For Respondents: Mr. Chetan Sharma, ASG, Mr. Ashish K. Dixit, CGSC, Mr. Umar Hashmi, Mr. Ayush Kumar, Advs., Mr. Saurabh Seth, Mr. Sukrit Seth, Ms. Neelampreet Kaur, Mr. Abhiroop Rathore, Mr. Kabir Dev, Mr. Sukhvir Singh, Advs., Mr. Rajveer Pandey, Government Counsel (GP)
