The case of M/s. Jaiprakash Industries Ltd. (now known as M/s. Jaiprakash Associates Ltd.) versus Delhi Development Authority (DDA) revolves around perpetual lease deeds executed in 1983 by the President of India in favor of M/s. Jaiprakash Associates Pvt Ltd for certain plots. These plots were later included in a scheme of amalgamation approved by the High Court of Judicature at Allahabad in July 1986, whereby M/s. Jaiprakash Associates Pvt Ltd merged with M/s. Jaypee Rewa Cement Ltd, subsequently renamed M/s. Jaiprakash Industries Ltd, and later M/s. Jaiprakash Associates Ltd, the present appellant.
An application by the appellant to the respondent-DDA for permission to mortgage the plots led to a demand for an unearned increase value of Rs. 2,13,59,511.20, which the appellant contested through representations and legal proceedings. The dispute arose over the interpretation of the perpetual lease deed’s clause II(4)(a), which restricted the lessee from selling, transferring, or parting with possession of the plots without the lessor’s written consent.
The appellant argued that the amalgamation did not constitute a transfer under the Transfer of Property Act, 1882 (TPA) and that the scheme of amalgamation, approved by the High Court, effectively transferred the plots to the transferee company without any consideration for transfer.
The respondent-DDA countered by referring to the order of amalgamation and contending that the properties specified in the schedule of the order were transferred to the transferee company, making the demand for unearned increase lawful.
The Supreme Court analyzed the clauses of the perpetual lease deed, the order of amalgamation, and relevant legal precedents. It concluded that the scheme of amalgamation effectively transferred the plots to the transferee company, as specified in the order, triggering the clause restricting transfers in the lease deed.
The Court rejected the appellant’s argument that the amalgamation did not constitute a transfer under the TPA, emphasizing the broad scope of the clause in the lease deed, which covered not only transfers but also parting with possession.
Ultimately, the Court found no illegality in the judgment of the High Court, upholding its dismissal of the appellant’s appeal. The appellant was directed to deposit the disputed amount with the Court, and the respondent-DDA was permitted to withdraw the principal amount along with accrued interest.
