Escorts Heart Institute And Research Centre Ltd vs Delhi Development Authority & Ors.

The Escorts Heart Institute and Research Centre, the appellant before us was allotted land measuring about 6.9 acres in various phases starting from initial allotment dated 8.4.1982 to the last allotment dated 14.06.1996 for setting up of a general public hospital. The lease deeds which have been executed are stated to be only for 4.757 acres. Three lease deeds have been executed for a total area for 4.757 acres while the entitlement for the remaining land continues to be governed by the allotment letters dated 3.5.1990, 21.3.1999, 15.5.1995, 31.7.1995 and 14.06.1996 for 2.435 acres.

A show cause notice was issued by the perpetual lessor Delhi Development Authority (DDA)- respondent No.1 dated 31.10.2003 making an allegation of violation of terms and conditions of allotment, as 25 per cent of the beds were to be reserved for free treatment of the weaker sections of the society and the OPD of the hospital was to provide free services to the patients falling in the indigent category which were being violated.

Another show cause notice dated 21.04.2004 was issued alleging that a merger had taken place on 01.04.2000 of the appellant entity with another society by the identical name established in Chandigarh, which was not a charitable society, and since the land had been leased for charitable purposes, such a merger without consent of the lessor, was in breach of the terms of allotment and the lease deed.

A reply was given to the latter aspect by the appellant on 20.07.2004, inter alia raising the plea that the amalgamation with the other society with share capital and similar objects as of the appellant would not amount to a transfer and thus, would not be in violation of Clause 5(a) of the perpetual lease deed.

An order was passed by respondent authority on 6.10.2005 qua both the notices recording that the show cause notice to the appellant dated 31.10.2003 had been triggered by a public interest litigation filed before the Delhi High Court in CWP No.2866/2002 entitled Social Jurist v. GNCTD for violation of conditions relating to free beds for the poor and that the amalgamation amounted to violation of the terms and conditions of the lease especially when no prior consent was obtained. The decision was communicated to determine the lease deeds of the appellant and to yield peaceful possession to the DDA.

The appellant then filed a civil suit with respect to suit lands for which no lease deed had been executed before the Delhi High Court being CS(OS) No.1440/2005 challenging this order dated 06.10.2005. The suit as framed is seeking a declaration that the order dated 06.10.2005 is illegal and non est as also a decree of permanent injunction restraining DDA as defendant in suit from dispossessing the appellant as plaintiff from the suit property consisting of the lease deeds and the letters of allotment where the Escorts Heart Institute and Research Centre had been established.

Summons were issued on the suit on 20.10.2005 and on an interim application under Order 39 Rule 1 and 2 of CPC, 1908, a restraint against recovery of physical recovery was directed. We are given to understand on behalf of the appellant that the interim order has been made absolute and the suit is pending trial after framing of issues.

The appellant also filed an OMP No.364/2005 under Section 9 of the Arbitration and Conciliation Act, 1996 in view of the lease deeds containing an arbitration clause. Interim protection was granted on this application while issuing notice on 07.10.2005 and the OMP was disposed of on 18.03.2008 by observing that the parties would abide by the final view taken in CS(OS) No.1440/2005.

The subsequent development after filing of the suit and of the OMP was the issuance of notice dated 9.11.2005 by the DDA to the appellant under sub-section (1) and Clause (b)(i) of sub-Section (2) of Section 4 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, post the determination of the lease. This notice was replied to by the appellant. The appellant also sought stay of the proceedings along with the reply but that request was declined on 13.01.2006.

The show cause notice dated 9.11.2005 and continuation of proceedings was assailed by the appellants by filing a Writ Petition (C) No.4672/2006 before the Delhi High Court but the said petition was dismissed by the learned Single Judge on 03.04.2006, permitting the proceedings to go on under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971.

The appellant thereafter preferred Letters Patent Appeal NO.612/2006 which was also dismissed on 03.09.2007, which order has been assailed before us.

The aforesaid impugned order records that the only contention raised before them was the view of this Court in Express News Papers Pvt. Ltd. & Ors. v. UOI & Ors.- (1986) 1 SCC 133. The DDA sought to rely on the Constitution Bench judgment of this Court in Ashoka Marketing Ltd. & Anr. v. Punjab National Bank & Ors. - (1990) 4 SCC 406.

In terms of order dated 29.10.2007 of this Court, proceedings before the Estate Officer were permitted to continue but passing of the final order was restrained. Ultimately, leave was granted on 10.01.2011 and the interim order was made absolute.

We have heard learned counsel for parties and would like to notice some subsequent developments.

The first development qua the show cause notice dated 31.10.2003 which triggered the order dated 6.10.2005 qua that aspect was in turn arising from directions sought in C.W.P. No. 2866/2002. We are informed that those proceedings have attained finality from this Court in Dharamshila Hospital & Research Centre v. Social Jurist & Ors.- SLP [C] No.18599/2007 vide order dated 01.09.2011 and learned counsel for the appellant accepts that the appellant is bound to provide 25 per cent of the beds in terms of the Clause of the lease. It is further submitted that the said aspect is being followed. Thus, in our view, if there is any non-compliance on that aspect, the matter having rested, it is always open to the competent authority to take action in accordance with law. The original cause arose from the litigation and since the litigation was pending and attained finality as aforesaid, that aspect does not really subsist any more.

The other more important aspect is arising from the merger issue. The merger issue is actually subject matter of suit CS(OS) No.1440/2005 and whether the deed of merger amounts to a violation of the terms of the perpetual lease or any letter of allotment would have to abide by the decision of that suit. Interim protection has already been granted to the appellant pending the suit. We are also informed on the basis of an affidavit filed by Union of India (subsequently impleaded as a party before us), that apparently the DDA passed a resolution on 3.6.2009 on representation of the appellant to regularize the breach, if any, that the Union of India sought to take a contrary stand as communicated vide letter dated 10.02.2010 disputing the authority of DDA to take such a decision and ordering a hold on the implementation of the resolution.

The surprising part is that despite the lapse of almost a decade there has been no finality to this aspect i.e. whether such amalgamation should not be treated as a breach as canvassed by the appellants. We would expect the Union of India and the DDA to look into the issue to take a final view so as to not only put an end to the present litigation but also issue various directions which may arise as a consequence therefrom. Three months' time is sufficient for the Union of India and DDA to take a final call on this issue.

We are of the view that once the matter is sub judice in the suit, the appellant is not an encroacher on public land, but an allottee in pursuance to the allotment letters/lease deeds of the DDA; the leases have not expired by efflux of time; the only reason for termination is stated to be the breach of the lease qua the issue of amalgamation which is pending decision in the suit, any action under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 would not be appropriate. If the appellant ultimately fails in the endeavour, as in the suit or any other appeal arising therefrom then only the occasion would arise for the proceedings to be taken under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971.

We are, thus, of the view that the proceedings initiated under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 in pursuance of the notice dated 9.11.2005 are liable to be quashed with the aforesaid liberty to the DDA.

The appeal is accordingly allowed leaving the parties to bear their own costs.