Delhi High Court Reverses Land Conversion Order, Upholds Government Ownership

The Delhi High Court overturned a 2010 decision permitting lease-to-freehold land conversion for National Cold Storage, affirming that the government retains ownership. The court ruled the lessee lacks an enforceable right to compel conversion, emphasizing the distinct legal relationship between contractual resumption and statutory land acquisition.

In a significant judgment, the Delhi High Court has overturned the 2010 order allowing National Cold Storage & Refrigeration Pvt Ltd to convert its leasehold land into freehold, emphasizing the continued government ownership of public land.

The Court examined the nuances of the 1951 lease, underscoring that the lease, granted for specific cold storage operations, included provisions allowing the government to reclaim the land for public purposes. Despite the lease's long-term nature, it was found to remain conditional and without conferring ownership rights to the lessee. The decision reverses a Single Judge's ruling and highlights that the executive policy of leasehold-to-freehold conversion does not ensure ownership entitlement.

The Court sided with the Central Government, noting that substantial parts of the land had been resumed for public projects. It asserted that the State cannot be forced to relinquish its property rights. Arguments from the lessee centered around the lease's duration and compensation claims, but the Bench clarified that resumption compensation does not equate to the land's market value, only covering buildings and a portion of the premium. The ruling delineates the line between contractual lease terms and statutory acquisition rules.

(With inputs from agencies.)