The Supreme Court of India has held that premises occupied by the Government under a perpetual lease deed emanating from a Government grant are governed exclusively by the terms of the grant and are insulated from the provisions of the Delhi Rent Control Act, 1958.
A Bench comprising Justice Sanjay Karol and Justice Prashant Kumar Mishra allowed an appeal filed by the Union of India against Sir Sobha Singh and Sons Pvt. Ltd., setting aside a Delhi High Court judgment that had affirmed the eviction of the Government from residential flats in Sujan Singh Park, New Delhi.
Legal Issue
The core question before the Court was whether the Union of India’s occupation of residential premises was governed by the terms of a perpetual lease deed under the Government Grants Act, 1895 (GG Act), or whether it constituted a landlord-tenant relationship subject to eviction under Section 14(1)(a) of the Delhi Rent Control Act, 1958 (DRC Act) for non-payment of rent.
The Court concluded that the DRC Act is not applicable to holdings originating in a Government grant. Consequently, it set aside the eviction order, ruling that the respondent’s remedy is confined to the recovery of rent in accordance with the law.
Background of the Case
The dispute originated from a perpetual lease deed dated April 26, 1945, executed by the Governor General in Council in favor of Sardar Bahadur Sir Sobha Singh & Sons Private Limited for 7.58 acres of land in Sujan Singh Park. The lease required the construction of residential blocks, and post-Independence, the Union of India stepped into the shoes of the lessor.
The Government occupied several flats for housing officials. The respondent claimed that the Government was a tenant paying a monthly rent of Rs. 2,400 per flat. Alleging a default in rent payment between 1989 and 1991, the respondent filed an eviction petition. The Additional Rent Controller (ARC) and the Rent Control Tribunal (RCT) concurrently found a landlord-tenant relationship and ordered eviction. The Delhi High Court affirmed these findings in 2020, leading to the present appeal.
Arguments of the Parties
Appellant (Union of India): Learned ASG Mr. K.M. Nataraj argued that Sections 2 and 3 of the GG Act mandate that Government grants operate according to their “tenor,” notwithstanding any other law. He contended that Section 3 of the DRC Act itself excludes premises belonging to the Government. He relied on Municipal Corporation of Delhi vs. Pradip Oil Corporation to assert that rights under a Government grant are insulated from inconsistent statutory provisions.
Respondent (Sir Sobha Singh and Sons Pvt. Ltd.): Learned Senior Counsel Mr. P.S. Patwalia argued that the GG Act was only intended to insulate grants from the Transfer of Property Act (TP Act). He relied on the four-judge bench decision in Collector of Bombay vs. Nusserwanji Rattanji Mistri, arguing for a narrow construction of Section 3 of the GG Act. He further asserted that the DRC Act, as subsequent welfare legislation, should apply to premises “lawfully let” by the Government under the proviso to Section 3(b).
Court’s Analysis
The Supreme Court observed that the lower courts had misdirected themselves by treating the arrangement as a conventional landlord-tenant relationship without considering its origin as a Government grant.
1. Scope of the Government Grants Act (GG Act): The Court rejected the narrow interpretation of Section 3 of the GG Act. It noted:
“Section 3 of the GG Act embodies a clear legislative mandate that every Government grant shall take effect according to its tenor, notwithstanding any rule of law, statute or enactment to the contrary. The expression ‘any rule of law, statute or enactment’ in the provision is of the widest amplitude and admits of no restrictive construction.”
2. Inapplicability of the DRC Act: The Court clarified that the DRC Act regulates conventional tenancies and does not extend to holdings regulated by a Government grant. Referring to Pradeep Oil Corporation vs. Municipal Corporation of Delhi, the Court stated:
“The rights, privileges and obligations of any grantee of the Government would be completely regulated by the terms of the grant, even if such terms are inconsistent with the provisions of any other law.”
3. Distinguishing Precedents: The Court held that the High Court’s reliance on Collector of Bombay was misplaced as that case dealt with distinct issues of revenue assessment. It instead followed the line of decisions in Azim Ahmad Kazmi vs. State of Uttar Pradesh and Union of India vs. Dinshaw Shapoorji Anklesari, which affirm the Government’s unfettered discretion under Section 3 of the GG Act.
4. Jurisdiction and Forfeiture: The Court found that since the DRC Act was inapplicable, the ARC had no jurisdiction. Furthermore, since the lease deed did not expressly provide for eviction for non-payment of rent, no such right could be inferred:
“The grant must operate according to its tenor, and its silence cannot be converted into a ground of forfeiture. The respondent’s right, therefore, is confined to recovery of rent in accordance with law.”
Decision
The Supreme Court allowed the appeal and set aside the Delhi High Court judgment dated January 8, 2020. The Court clarified that this judgment does not preclude the respondent from pursuing other appropriate civil remedies for rent recovery.
Case Details:
- Case Title: Union of India v. Sir Sobha Singh and Sons Pvt. Ltd.
- Case No.: Civil Appeal No. 4686 of 2026
- Bench: Justice Sanjay Karol and Justice Prashant Kumar Mishra
- Date: April 22, 2026
