Property lawyer: the DDA is entitled for unearned increase of leasehold plot in the case of demerger of the company; SC.

Supreme Court of India

Justice A.M. Khanwilkar

The Supreme Court of India has set aside the order of the division bench of the High Court of Delhi in the case titled as "DDA versus Nalwa Sons Investment Limited and another", where by the High Court has allowed name change with the DDA without payment of unearned increase.

In the said case the DDA has raised the demand of unearned increase for transferring the name from one public limited company to other, due to de-Merger.

The SC setting aside the Judgment held as terms of perpetual lease were not challenged: in the demerger although directors remain same; also there is 98.6 % shareholding of transferor company in transferee company; and no consideration amount is paid - then, also it requires prior permission and payment of unearned increase in terms of clause 6(a) of the lease deed. The demand was upheld.