Supreme Court orders DDA to refund ₹164.91 crore to Reliance

The Supreme Court of India recently directed the Delhi Development Authority (DDA) to refund over ₹164.91 crore to Reliance Eminent Trading and Commercial Limited, paid by it in 2007 for purchase of a commercial plot in Jasola [Reliance Eminent Trading and Commercial Pvt Ltd v. Delhi Development Authority]

After the acquisition of the subject land by DDA was declared as lapsed by Delhi High Court in 2018, Reliance lost its rights over the plot purchased in a public auction. It then led to a civil dispute between Reliance and DDA over refund of the amount.

A Bench of Justices JK Maheshwari and Atul S Chandurkar rejected DDA's submission that Reliance continued to retain possession of the land and lost it only due to some miscreants.

The Court added that DDA cannot retain the bid amount or seek possession of the land from Reliance as the title of the land had gone back to its original owner.

"The defence of the DDA herein is fanciful as they seek to claim the possession from the appellant herein, whereas it is now for the erstwhile owners to seek appropriate remedies. In addition, it is necessary to observe that once, on a petition filed by the erstwhile owner, lapsing of the acquisition was directed with liberty of re-acquisition, the auction proceedings have lost their efficacy," the Bench said.

The Court was hearing an appeal filed by Reliance against a Delhi High Court order.

In 2007, Reliance had emerged as the highest bidder in a public auction for the land located in Jasola. It paid the entire consideration amount of over ₹164 crore, along with stamp duty and other charges, and was granted a registered conveyance deed in 2008.

However, in 2015, the original landowner challenged the acquisition of the land itself before the Delhi High Court. The challenge was based on the provisions of the 2013 land acquisition law, under which acquisition proceedings lapse if compensation has not been paid.

In 2016, the High Court declared that the acquisition had lapsed on this ground. This finding was subsequently upheld by the Supreme Court in 2017 which granted DDA six months to initiate fresh acquisition proceedings. It was made clear that if such steps were not taken within the stipulated time, the land would revert to the original owner.

DDA failed to take any steps within the given time. As a result, the acquisition lapsed permanently and DDA lost its title over the land. This rendered the Reliance's purchase ineffective, as it no longer had any valid rights despite having paid the full consideration.

Reliance then sought refund of the amount but DDA did not respond. The company then instituted a commercial suit in 2020 before the Delhi High Court seeking recovery of the amount paid along with interest.

The High Court ruled that a trial was required in the case. However, it declined to pass a summary judgement as sought by Reliance. The matter then reached the top court.

In the judgement dated April 29, the Court said that the refusal by the High Court to grant summary judgment was unjustified.

"The High Court completely erred in reading the issue of refund as contingent to handing over of the possession. There is nothing in law or fact to show that possession is sine qua non for refund. The DDA is not able to dislodge the fact that the acquisition lapsed by orders of this Court. A necessary corollary is that refund has to be initiated for the auction purchaser. Further, there is no valid reason portrayed by the respondent to refuse refund or retain the amount any longer."

The Court further observed that the plea of restitution for the return of possession was wholly illusory and misconceived.

The Court emphasised that that a summary judgement under Code of Civil Procedure (CPC) was an important procedural tool for providing a swift and cost-effective alternative to a full-fledged trial, especially in cases where prolonged adjudication would serve no real purpose.

It further said that private arbitration, once seen as a solace, cannot be the panacea for all disputes.

"There is a need, as well as growing support, for developing new extensive pre-trial processes. A conventional trial no longer reflects modern reality and requires re-calibration. In this light, to ensure balance, there is a requirement of simplified and proportionate tools for efficacious adjudication. This implores our system to adopt and embrace a shift in the culture of efficiency in dispute resolution," the Bench said.

The Court referred to Charles Dickens’ Bleak House to underscore the persistent issue of delays in the justice delivery system.

“There is no doubt that our justice delivery system is premised on being fair, independent, and just. However, it is often criticized for delay. Ordinary citizens complain about the cost and delay associated with civil disputes. There are many instances in India which have the bearings of the infamous fictional case of Jarndyce v. Jarndyce, as recounted by Charles Dickens in his novel ‘Bleak House,” the Court said.

In light of the above, the Court directed DDA to refund ₹164.91 crore to Reliance along with interest at 7.5% from the date of payment. It also set aside the conveyance deed to restore the parties to their original position.

[Read Judgment]