Delhi High Court Rebukes DDA For Improper, Excess Demarcation Of Land For Hospital; Says Can't Demand Ground Rent On Ambiguous Boundaries

Justice Manoj Jain remarked “The failure on the part of DDA to timely address the issue of excess land and its demarcation and to resolve the discrepancies reflects lacklustre approach of DDA. Such administrative bodies are expected to handle matters with efficiency, transparency, and in a timely manner, especially when public interests are involved. Inaction on the part of DDA has prejudiced the petitioner, and failure to act in a reasonable time-frame clearly goes against DDA. Therefore, the demand of ground rent, before clarifying the actual land area and demarcation, would potentially amount to unjust enrichment, especially when DDA, itself, is largely responsible for generating ambiguity and uncertainty.”

The court further said that despite knowing about handing over of excess land in 2014 the DDA took no action for correction or demarcation, "which clearly shows sluggishness and indecisiveness on the part of DDA". 

"It was the primary duty of respondent-Authority, who had allotted the plot in question, to ensure that a properly demarcated land was handed over to petitioner or at least, should have been corrected the demarcation without any delay. DDA seems to have slept over the matter for around 7 years.This case thus presents a distinctive and exceptional scenario, wherein the demarcation of the plot in question was not properly carried out at the time of allotment and handing over of possession. Additionally, no formal lease deed was ever executed in favour of the petitioner company, nor was the allotment rescinded or cancelled by DDA, for not adhering to the schedule about raising construction," the court observed.

Background

The petitioner-company became a successful bidder for an auction conducted by the DDA for a plot of land. The plot was for construction of a hospital and the petitioner paid the entire of Rs. 38.73 crore for the plot. As per the terms of the lease, the ground rent for first five years was to be charged @ Re.1/- only and thereafter @2.5% per annum on premium.

The physical possession of the land was handed over to the petitioner in 2011. However, the petitioner claimed that it was handed over an excess area of 2230 sq. meters over the allotted area of 9970 sq. meters.

The petitioner-company argued that DDA failed to clearly identify and demarcate the said plot. The petitioner stated that due to the erroneous handing over of possession and non-execution of any lease-deed in its favour by DDA, it has been unable to finalise the construction work of hospital on the said plot.

The petitioner thus sought direction to the DDA to handover a correct and actual physical possession of a plot. It also sought for execution of lease deed in its favour and to defer the collection of ground rent till further 5 years from the date on which the correct and actual and physical possession is handed over to it.

Findings

The High Court observed that the though the petitioner had approached DDA to get the lease-deed executed in its favour, there was no response from the DDA. It noted that the petitioner itself had sent a communication to the DDA in 2018, intimating that it had received excess land and further sought to obtain the same.

It remarked “It is evident that the petitioner has been chasing the respondent/DDA to resolve the dispute pertaining to such excess land but DDA has failed to act upon the same.”

It noted that demarcation was conducted only after the modification of the Layout Plan was done by the Screening Committee of the DDA in 2021. It stated that despite having physical position of the plot, the petitioner was in no real position to make use of the same since excess area had been handed over to it and it was not possible for the petitioner to know which portion of the entire area would be taken back as excess area.

The Court further referred to Rule 42 of the DDA (Disposal of Developed NAZUL Land) Rules, 1981, which provides that every allottee is required to pay, in addition to the premium, annual ground rent for holding Nazul land. The Court noted that such exercise was never carried out by the DDA.

On DDA's belated demand of ground rent, it remarked “Moreover, it is beyond comprehension as to why when the ground rent had allegedly fallen due in the year 2014, demand was made as late as in the year 2022. Such belated demand of ground rent rather suggests that DDA was also of the view that there was something lacking in the in the handing over and that demarcation was, therefore, required.”

Further on DDA's contention that petitioner failed to complete the construction within the stipulated period, the Court remarked that it was not possible for the petitioner to carry out construction without the lease deed.

“It is thus perplexing to comprehend as to how the petitioner, or any other individual for that matter, could have initiated construction, without first securing the requisite legal documentation, namely the lease deed, which is essential for such a project.”

Therefore, considering the 'peculiar' facts of the case, the Court directed the DDA to treat ground rent at the rate of Rs. 1 per annum until 14.06.2021. It stated that the ground rent at the rate of of 2.5% per annum on the premium of the plot would be levied only from 15.06.2021. It said that DDA shall issue fresh demand of ground rent, and will give any necessary adjustments if needed. It also directed for execution of a lease-deed in favour of the petitioner company within eight-weeks.

"It is hoped that after complying with the abovesaid directions, DDA, in future, keeps a very strict vigil and does not endure any further delay in construction of hospital," the court underscored.

Case title: Flourish Hospitals Pvt. Ltd vs. Delhi Development Authority

Citation: 2025 LiveLaw (Del) 262