Solicitor General of India Tushar Mehta 25 March 2022 told the Supreme Court that a private firm had sent bouncers to evict government officials from Sujan Singh Park, near Khan Market, in Lutyens Bungalow Zone. The apex court is seized of the matter pertaining to the dispute between Sir Sobha Singh & Sons Private Limited and Union of India that pertains to alleged non-payment of rent by the latter which is in possession of 13 flats, 41 servant quarters and 26 garages in the area.

Expressing surprise over Mehta’s submission of bouncers being sent against the government, the Chief Justice of India N V Ramana has listed the matter for hearing next week.

Sujan Singh Park

Governor General in Council, a governing body during British rule in India, in April 1945 under a perpetual lease deed leased about 7.58 acres, situated on North and South Sujan Singh Park, to Sardar Bahadur Sir Sobha Singh and Sons Private Limited for constructing residential flats for the British officials during the Second World War. A total of 84 flats were constructed. Under Clause 2(9) of the deed, it was agreed that a certain number of flats would be leased to the government of India for accomodation of its officials at a fair rent. During the war and one year after it ended, the Centre had the right to use all the buildings; the government, after the war, stood entitled to less than 50% of the buildings at a fair rent. However, the rent for the flats has to be assessed by the central government itself.

Sardar Sobha Singh, a civil contractor, was one of the original real estate developers of New Delhi. He was also the father of writer Khushwant Singh who lived in Sujan Singh Park till his death.

What is the controversy?

According to the private firm, the Centre failed to pay rent for the flats in their possession after 31 March 1989. The company in 1991 initiated eviction proceedings against the Centre. In 2004, the Additional Rent Controller found that the Centre had indeed failed to make payment of the arrears of rent despite issuance of notice by the company to it. An order of eviction from five single bedroom flats, nine double bed room flats, 39 servant quarters and 25 garages was issued on 14 February 2005. Rent Control Tribunal in September 2007 ruled that the suit property was covered by the Delhi Rent Control Act (DRCA) and that the relationship of landlord and tenant was established. The tribunal affirmed the order of the ARC. The execution of the order however was suspended for a period of six months on the condition that the Centre pays the arrears of the rent along with the interest of 15 per annum and a cost of Rs 1 lakh.

What did the Delhi High Court say in 2020?

The Centre, in the petition filed before the High Court in 2008, questioned applicability of the Delhi Rent Control Act — under which a tenant can be evicted for non-payment of rent — in view of the Government Grants Act (GGA), 1895. The 1895 law states that the Transfer of Property Act (TPA) will not apply to government grants and the provisions, restrictions, conditions and limitations contained in such grant or transfer from the government shall be valid and take effect, notwithstanding any other law.

Justice Prateek Jalan in the January 2020 ruling said that the private firm is bound to accept the lease as fixed by the Centre but there is nothing to suggest in the lease terms that whether the grantee or the firm would be entitled to avail of ordinary remedies otherwise available to a landlord in case the Centre fails to comply with the condition of the payment of rent.

“To the extent that the absence of an express provision in this respect gives rise to any ambiguity in ascertaining the consequences of non-payment, the benefit of the doubt must be given to the respondent,” held the bench, adding that the judgments of the court mandate interpretation of any ambiguity in a government grant against the government.

Rejecting a submission implying a wholesale exclusion of the DRCA, the court said the GGA restricts only the rights and liabilities of the parties under the TPA. The bench also stayed the execution of the tribunal’s order till December 2020 subject to the Centre meeting the conditions on payment of arrears within two months.

What are Centre’s arguments before the Supreme Court and what is the latest position of the dispute?

The Centre on 24 March 2022 filed an SLP against the High Court judgment, contending that the Section 3 of GGA makes it clear that any government property given to any person in the form of a grant will stand excluded from the scope of the application of the provisions of any other law or statute. The Centre in the SLP has also said that an inspection of premises at Sujan Singh Park (South) was conducted in May 2011 and several breaches of the lease deed terms were noticed. The Centre has claimed an amount of Rs 168.38 crore for the breaches.

What prompted the Centre to approach the Supreme Court is the initiation of proceedings before the Patiala House Courts by the firm for execution of the eviction order. A lower court on 25 February 2022 directed the bailiff to deliver possession of the flats and other properties to the firm. The bailiff accompanied by the police visited the premises on 3 March and locked various properties, despite the Centre having given all the dues alongwith the interests and costs — an amount of Rs 14,71,199 — to the firm, as per the SLP.

The Centre has argued that officers of higher ranks reside in the 13 flats and it is currently facing acute shortage of accommodations due to an ongoing redevelopment of seven government colonies. Centre on 7 March 2022 also issued a demand letter to the private firm with respect to the dues of Rs 168.38 crore and by another communication requested it to place 50% of all the residential accommodations at the disposal of the Directorate of Estates. The Directorate of Estates has also asked the police for protection at the flats.