In Brief
The Supreme Court examined whether an auction purchaser of a leasehold property must pay 50% of the unearned increase in value to the lessor (DDA) when converting leasehold rights to freehold rights. The Court held that the DDA was not entitled to claim unearned increase because the property was auctioned at its market value (not a voluntary transfer under the lease deed condition), and the Income Tax Department had already paid unearned increase when acquiring the property. The Court also held that the Sale Deed conveyed only leasehold rights, not freehold rights, so the purchaser was not entitled to refund of conversion charges but must be allowed to complete the conversion process in accordance with law.
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