'Agreement To Lease Didn't Create Leasehold Rights Without Execution' : Supreme Court In Delhi Development Authority's Appeal
Live LawWhile interpreting the clauses in an agreement to lease entered into between the Delhi Development Authority and a party, the Supreme Court noted that the agreement to lease did not create leasehold rights unless the lease deed was executed and registered. Challenging the auction sale in the first respondent's favour, the Appellant DDA approached the Delhi High Court arguing that Mehta Construction never acquired leasehold rights, and thus, the sale was invalid. The Court clarified that since the agreement to lease in favor of M/s Mehta Constructions was on an "as it is basis”, the subsequent transferee, i.e., the first respondent, could only acquire the rights that M/s Mehta Constructions held. "The first respondent will get only those rights which M/s Mehta Constructions had under the lease agreement, provided the rights can be claimed at this stage. At the same time, if according to the case of the appellant, M/s Mehta Constructions had committed breach of the lease agreement, notwithstanding the impugned orders, it will be always open for the appellant to adopt appropriate remedy for recovery of possession and/or recovery of unearned income against the first respondent.”, the court held.
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