DELHI DEVELOPMENT AUTHORITY versus M/S. KARAMDEEP FINANCE & INVESTMENT (I) PVT. LTD. & ORS.

Citation: [2019] 3 S.C.R. 725 · Decided: 12-02-2019 · Supreme Court of India · Bench: ASHOK BHUSHAN · Disposal: Disposed off

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Judgment (excerpt)

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DELHI DEVELOPMENT AUTHORITY
v.
M/S. KARAMDEEP FINANCE & INVESTMENT (I) PVT. LTD.
& ORS.
(Civil Appeal No. 1533 of  2019)
FEBRUARY 12, 2019
[ASHOK BHUSHAN AND K. M. JOSEPH, JJ.]
Transfer of Property:
Leasehold property – Acquired under Chapter XXC of the
Income Tax Act – Income Tax Department  paid amount towards
unearned increase of market value to Delhi Development Authority
(DDA) – Thereafter the property was put to auction, through the
department of Revenue in which respondent was the highest bidder
– Sale deed was executed in favour of the respondent – Thereafter
respondent moved application with DDA for conversion of lease-
hold rights in the plots into freehold rights and also deposited amount
towards conversion charges – DDA, thereupon demanded an amount
from the respondent towards unearned increase of market value –
The demand raised by DDA was set aside by Single Judge of High
Court in writ petition and DDA was directed to refund the conversion
amount – In LPA, High Court set aside the order of Single Judge
and directed DDA to refund the amount towards conversion fee,
while holding that unearned increase was not payable by the
purchaser to DDA – On appeal, held: Since the auction was made
on the market value of the property, there was no question of claim
of unearned increase by DDA – Also, since income tax department
had already paid unearned increase, DDA was not entitled to raise
any demand of unearned increase – On interpreting the auction
notice and the sale deed it is clear that what was transferred to the
respondent was leasehold right – Therefore, the respondent is not
entitled for refund of conversion charges – DDA is directed to
process the respondent’s application for conversion of leasehold
rights into freehold rights – Income Tax Act, 1961 – s. 269 UD.
[2019] 3 S.C.R. 725
725
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SUPREME COURT REPORTS
[2019] 3 S.C.R.
Deeds and Documents:
Interpretation of deeds and documents – Held: While
construing documents, intention of the parties have to be
ascertained.
Doctrines/Principles:
Principle of merger – Applicability of.
Disposing of C.A. No. 1534 of 2019 and dismissing C.A.
No. 1533 of 2019, the Court
HELD: 1. In the present case, the appropriate authority
has exercised its power under Section 269UD of the Income Tax
Act for the purchase of the property by the Central Government.
It is by exercise of statutory power that rights of lessee were
purchased by Central Government.  Central Government issued
auction notice for auction of property in question. All bids in
auction of a property are given normally to match the market
price of the property.  When the petitioner gave highest bid and
became the successful auction purchaser, the auction purchase
has to be treated on the basis of market value of the property.
When the auction was made on the market value of the property,
there was no question of claim of unearned increase by the DDA.
On purchase of the property under Section 269UD of the Income
Tax Act, the Income Tax department has already paid unearned
increase to the DDA. Therefore, High Court has rightly held that
DDA was not entitled to raise any demand of unearned increase
from the writ petitioner. [Para 12][736-A-E]
2.1 A plain reading of clauses 1 and 2 of the Sale Deed does
give impression that what was sold to the writ petitioner was all
rights, titles, interests and appurtenances but Clause 3 of the
same Sale Deed, gives a different impression. The principles of
construction of documents are well settled.  While construing
the documents, intention of the parties have to be ascertained.
In cases of ambiguity, several parts of the document have to be
examined to find out what was really intended by the parties. The
auction notice by which the property was put to auction, details
of four properties were given. A perusal of the details of the
properties indicate that property in question was included as Item
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No. 2, which was mentioned as “This is a lease hold residential
plot”. So far as properties at Sl. Nos. 1, 2 and 3, the words
mentioned were “leasehold residential plots” whereas with
regard to property details given at Sl. No.4, it was mentioned
that “all rights, titles and interests in the dwelling unit”, which, if
contrasted with details of properties given at Sl. Nos. 1, 2 and 3
contains the intendment.  Thus, there cannot be any doubt that
property in question, which was put in auction was a property as
leasehold rights res

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