Transfer of Property Act, 1882 – Section 5 -Leased Plots – Demand of unearned increase – Amalgamation of Company – Clause restricting transfer in the lease deeds was broad enough to cover involuntary transfers, including mergers or amalgamations. – The appellant contended that the amalgamation of companies does not amount to a transfer within the meaning of the Transfer of Property Act, 1882 (TPA), and therefore, the clause restricting transfer in the lease deeds did not apply. However, the respondent-DDA argued that the order of amalgamation clearly transferred the plots to the appellant, and thus, the demand for unearned increase was justified.
Court analyzed the clauses of the perpetual lease deeds and the order of amalgamation. It observed that the clause restricting transfer in the lease deeds was broad enough to cover involuntary transfers, including mergers or amalgamations. Referring to previous judgments, the Court held that such transfers attracted the payment of unearned increase value as per the lease terms.
The Court rejected the appellant’s argument that the transfer did not fall within the definition of transfer under Section 5 of the TPA, noting that the clause in the lease deeds was broader in scope. It upheld the demand for unearned increase value by the respondent-DDA.
Accordingly, the appeal was dismissed with no order as to costs, and the appellant was directed to withdraw the principal amount deposited with the Court along with accrued interest.
The judgment reinforces the principle that clauses in lease deeds restricting transfer are applicable to mergers or amalgamations, and such transfers may attract payment of unearned increase value as per the lease terms.
SUPREME COURT OF INDIA
2024 STPL(Web) 230 SC
M/S. Jaiprakash Industries Ltd. (Presently Known As M/S. Jaiprakash Associates Ltd.) Vs. Delhi Development Authority
Civil Appeal No. 8336 of 2009-Decided on 05-04-2024
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