Delhi Development Authority Vs Corporation Bank & Ors. (Supreme Court of India)
Auction Purchaser Innocent Victim: SC Orders Restitution, Cancels Mortgage & Sale- SC Slams Bank for Auctioning Property Without Title – Bank Directed to Refund with 9% Interest- SC Quashes Illegal Auction of DDA Plot – Doctrine of Restitution Applied – Auction Purchaser Protected, Bank Bears Liability
The Supreme Court set aside an e-auction of DDA land, holding that the mortgage created in favour of Corporation Bank was void ab initio for want of prior consent of the Lieutenant Governor, as mandated under the lease deed.
The case involved Plot No.25, Facility Centre-33, Jasola, New Delhi, allotted on 01.10.2001 to Sarita Vihar Club for a recreational & sports facility. Under the allotment terms & lease deed dated 28.01.2005, any mortgage required prior written consent of the Lieutenant Governor. However, the club mortgaged the plot to Corporation Bank without such approval. Upon default, the Bank invoked proceedings before DRT for recovery of dues & auctioned the property on 09.11.2012, where M/s Jay Bharat Commercial Enterprises Pvt. Ltd. emerged as the highest bidder for ₹13.15 crores. A sale certificate was issued on 12.07.2013.
The DDA objected, claiming the mortgage was illegal & it had pre-emptive rights & entitlement to unearned increase. Its objections before DRT were rejected, writ petitions before Delhi High Court were dismissed, leading to the present appeal.
