$-

* IN THE HIGH COURT OF DELHI AT NEW DELHI

BEFORE
HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV

+ CS (COMM) 12 of 2021

1. RAJIV SARIN
SON OF LATE SHRI H.K. SARIN,
6002, ROXBURY AVENUE, SPRINGFIELD
VIRGINIA, USA 22152
2. DEEPAK SARIN
SON OF LATE SHRI H.K. SARIN
2D CHARLES COURT, REST HOUSE ROAD
BANGALORE 560 001, KARNATAKA
3. RADHIKA SARIN
(SINCE DECEASED THROUGH LEGAL HEIR)
a) VEERA SARIN
VILLA NO. 113, RAJPUR ROAD,
DHORAN KHAS, OPP IT PARK,
RAJPUR ROAD ENCLAVE, DEHRADUN,
DEHRADUN G.P., UTTARAKHAND – 248001.

....PLAINTIFFS
(Through: Mr. Sidhant Kumar, Ms. Manya Chandok and Mr. Om Batra,
Advocates.)
Versus
1. DIRECTORATE OF ESTATES
MINISTRY OF HOUSING & URBAN AFFAIRS
GOVERNMENT OF INDIA
THROUGH ITS DIRECTOR
NIRMAN BHAWAN
MAULANA AZAD ROAD
NEW DELHI-110001

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 2. MINISTRY OF LABOUR & EMPLOYMENT
GOVERNMENT OF INDIA
THROUGH ITS SECRETARY
SHRAM SHAKTI BHAWAN
RAFI MARG, NEW DELHI-110001
3. COMPETENT AUTHORITY UNDER SMUGGLERS AND
FOREIGN EXCHANGE MANIPULATORS (FORFEITURE OF
PROPERTY) ACT, 1976.
THROUGH ITS JOINT COMMISSIONER
9TH FLOOR B WING,
LOK NAYAK BHAVAN
NEW DELHI 110001 ....DEFENDANTS

(Through: Mr. Vikrant N. Goyal, Mr. Nitin Chandra, Mr. Aditya Shukla
and Ms. Nishu, Advocates.)
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% Reserved on: 19.03.2025
Pronounced on: 02.05.2025
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JUDGMENT
The instant civil suit seeks for damages of mesne profits, loss of
market rent and the damages arising out of outstanding property tax, along
with pendente lite and future interest, etc.
2. The plaintiffs are the owners of Flat No.1108, Ansal Bhawan,
Kasturba Gandhi Marg, New Delhi-11000, admeasuring 820 sq. ft.
(hereinafter referred to as ' the suit property').
3. The plaintiffs, on 01.09.1976, leased out the suit property to defendant
No.1. Thereafter, further lease agreements were executed, which stood
expired on 25.11.1995.
4. The facts of the case would further indicate that on 05.08.1998,
defendant No.3 i.e. Competent Authority under Smugglers and Foreign

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 Exchange Manipulators (Forfeiture of Property) Act, 1976 (hereinafter
referred to as SAFEMA), forfeited the suit property in purported exercise of
power under Section 7 thereof. Resultantly, with effect from 01.05.1999,
defendant No.1 stopped paying the rent to the plaintiffs, citing that the suit
property was forfeited.
5. Thereafter, the order dated 05.08.1998 came to be challenged by the
plaintiffs in W.P. (Crl.) 1606 of 2008 before this Court. The Division Bench
of this Court, vide judgment dated 01.12.2014, quashed the order of
forfeiture holding the same to be without jurisdiction.
6. Despite the aforesaid judgment, defendant No.1 failed to hand over
the possession of the suit property to the plaintiffs, and consequently, the
plaintiffs filed a fresh writ petition bearing W.P. (C) No.10395 of 2019.
This Court vide order dated 16.07.2020 directed defendant No.1 to hand
over the possession of the suit property and to pay arrears of rent from
01.05.1999 to 02.07.2020, based on the last admitted rent, i.e., Rs. 20,500/-
per month.
7. Vide the aforenoted order, this Court recorded the statement of
respondent No.3 therein, who is defendant No.1 in the instant civil suit, that
without prejudice to the rights and contentions of the parties, the said
defendant was ready to pay the arrears at the same rate as the last rent paid
to the plaintiffs. The Court also observed in paragraph 6 of the said order
that the right to compensation, interest, and mesne profits in respect of the
use of the suit property would be adjudicated independently in appropriate
proceedings, as the aforementioned aspect was not amenable to the writ
jurisdiction of the Court under Article 226 of the Constitution of India, 1950
(hereinafter referred to as the Constitution).

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 8. The Court finally vide order dated 28.07.2020 clarified that in terms
of the earlier order dated 16.07.2020, all rights of the parties were directed
to be reserved.
9. The plaintiffs, therefore, instituted the instant civil suit for the
following reliefs: -
“A. Pass a decree in favour of the Plaintiffs and against the Defendant
No. 1 directing payment of Rs.Rs.2,20,70,954/- (Rupees Two Crores
Twenty Lakhs Seventy Thousand Nine Hundred and Fifty Four Only)
towards damages for mesne profits and loss of market rent due to the
illegal use and occupation of Flat No.ll08, Ansal Bhawan, Kasturba
Gandhi Marg, New Delhi for the period 01.05.1999 to 02.07.2020;

B. Pass a decree in favour of the Plaintiffs and against the Defendant

No. 1 directing payment of Rs.9,89,077/- (Rupees Nine Lakhs Eighty-
Nine Thousand Seventy-Seven Only) towards damages arising out of
outstanding maintenance charges (including water charges) in relation
to illegal use and occupation of Flat No.1108, Ansal Bhawan, Kasturba
Gandhi Marg, New Delhi for the period 01.05.1999 to 02.07.2020;

C. Pass a decree in favour of the Plaintiffs and against the Defendant

No. 1 directing payment of Rs. 43,53,912/- (Rupees Forty-Three Lakhs
Fifty-Three Thousand Nine Hundred and Twelve Only) towards damages
arising out of outstanding Property Tax in relation to illegal use and
occupation of Flat No. l108, Ansal Bhawan, Kasturba Gandhi Marg,
New Delhi for the period 01.05.1999 to 02.07.2020;

D. Pass a decree in favour of the Plaintiffs and against the Defendant

No. 1 awarding pre-suit, pendent lite and future interest at the rate of
12%p.a.”

SUBMISSIONS BY THE PARTIES

10. Mr. Sidhant Kumar, learned counsel for the plaintiffs, at the outset,
submits that the plaintiffs are the rightful and legal owners of the suit
property by virtue of the Article of Agreement dated 06.03.1972. According
to him, the record unequivocally establishes a systematic violation of the
proprietary rights of the plaintiffs, which commenced during the period of

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 proclamation of Emergency in 1977 and has resulted in protracted and
multifaceted litigation.
11. Learned counsel for the plaintiffs further submits that possession,
admittedly, remained with the defendants from 01.05.1999 until 02.07.2020
without any renewal of the lease. It is further submitted by the learned
counsel that the crux of the defense taken by the defendants is predicated
upon the forfeiture order dated 05.08.1998, which was already quashed vide
order dated 01.12.2014 by the Division Bench of this Court on the ground of
it being without jurisdiction. He further asserts that it is a settled position of
law that an order passed without jurisdiction is non-est and confers no legal
sanctity or authority upon the actions flowing therefrom. Accordingly, he
states that the possession of the suit property by the defendants was patently
unlawful and constitutes wrongful occupation for which the plaintiffs are
liable for compensation.
12. Mr. Kumar, therefore, submits that the plaintiffs are entitled to be
compensated under three independent heads: first, by way of mesne profits
for the loss of income and use; second, by way of reimbursement for
maintenance charges incurred during the period of unlawful occupation; and
third, by way of restitution of the property tax payments made by the
plaintiffs during such time when the defendants were in alleged wrongful
occupation of the suit property.
13. Per contra, Mr. Vikrant N. Goyal, learned counsel appearing for the
defendants, takes the Court through the written statement filed by them to
point out that the plaint instituted by the plaintiffs is ex facie untenable both
in law and on facts, and is, therefore, liable to be dismissed. He further
draws the attention of the Court to the fact that the suit property stood

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 forfeited to the Central Government under Section 7(3) of SAFEMA vide
order dated 05.08.1988 passed by the competent authority, and the forfeiture
remained in operation until 28.03.2016, when the proceedings under
SAFEMA stood closed in accordance with judgment dated 01.12.2014.
14. It is also submitted that, as per the mandate of Section 7(3) of
SAFEMA, upon such forfeiture, the suit property vested absolutely in the
Central Government free from all encumbrances. Consequently, it is averred
by learned counsel that the plaintiffs cannot, in law or equity, assert any
right, claim, interest, or benefit whatsoever in respect of the suit property for
the period during which it remained forfeited.
15. Learned counsel further submits that the instant suit is also expressly
barred by the provisions of Section 23 of SAFEMA, which provides
complete statutory immunity to the Central Government and its officers for
any action taken, or intended to be taken, in good faith in pursuance of the
provisions of the Act or the rules framed thereunder. Accordingly, it is
stated that any relief sought against the defendants is not maintainable in
law.
16. It is also contended by learned counsel that at no point were the
defendants in unlawful or unauthorised possession of the suit property. In
this regard, it is further submitted that defendant No. 1 had been remitting
rental payments to the plaintiffs initially, which were subsequently
discontinued in compliance with directions received from the competent
seizure authorities with effect from 01.05.1999. Thereafter, according to the
learned counsel, pursuant to the directions of this Court, a cumulative
amount of Rs. 52,08,323/- has already been remitted by defendant no.1 to
the plaintiffs towards arrears of rent.

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 17. The Court vide order dated 10.02.2022 framed the following issues
for adjudication: -

“(i) Whether the occupation of the defendant No. 1 of flat No. 1108,
Ansal Bhawan, Kasturba Gandhi Marg, New Delhi-110001, for the
period 1st May, 1999 to 2nd July, 2020 was illegal? OPP

(ii) Whether the plaintiffs are entitled to a sum of Rs.2,20,70,954/-

towards damages, mesne profits and loss of market rent for the period
May, 1999 to 2nd July, 2020 on account of such illegal occupation? OPP

(iii) Whether the plaintiffs are entitled to a sum of Rs.9,89,077/- towards

outstanding maintenance charges, including water charges, for the
period 1st May, 1999 to 2ne July, 2020? OPP

(iv) Whether the plaintiffs are entitled to a sum of Rs.43,53,912/-

towards outstanding property tax for the period 1st May, 1999 to 2nd
July, 2020? OPP

(v) Whether the defendants are not liable to pay property tax, as claimed
by the plaintiffs? OPD

(vi) Whether the sum of Rs.52,08,323/- was towards a full and final
settlement of the dues, as claimed by the defendants? OPD

(vii) Whether the plaintiffs are entitled to interest? If so,at what rate and
for what period? OPP

(viii) Relief.”

18. The plaintiffs, in order to prove their case, have examined as many as
four witnesses. PW-1 is plaintiff No.1 himself, namely, Mr. Rajiv Sarin,
PW-2 is Mr. Shankar Singh, who is the Sub-Registrar and the witness to two
of the lease deeds executed between the parties. PW-3 is Mr. Amit Sharma,
Tax Inspector in the office of NDMC Palika Kendra, New Delhi and PW-4
is Mr. Sunil Kumar, Superintendent L&DO Office, Nirman Bhawan, New

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 Delhi.
19. Plaintiffs have exhibited the following documents: -
Ex.P/1: True copy of Articles of Agreement dated 06.03.1972;
Ex.P/2: True copy of Forfeiture Order dt. 05.08.1998;
Ex.P/3: True copy of Judgment in W.P. (Crl.) No. 1606/2008 dated
01.12.2014;
Ex.P/4: True copy of Quashing of forfeiture order dated. 28.03.2016;
Ex. P/5: True copy of the letter dated 07.04.2017
Ex. P/6 : True copy of the letter dated 01.09.2017
Ex. P/7: True copy of the letter dated 02.11.2017
Ex. P/8: True copy of the letter dated 25.07.2018
Ex. P/9: True copy of the representation dated 01.07.2019
Ex. P/10: Order dt. 02.12.2019 in W.P. (C) No. 10395/2019;
Ex.P/11: Order dt. 12.12.2019 in W.P. (C) No. 10395/2019;
Ex.P/12: True copy of the letter dated 30.12.2019 issued by
Defendant No.l
Ex.P/13: True copy of the response letter dated 07.01.2020 issued by
the Plaintiffs
Ex.P/14: True Copy of the Joint Inspection report dated. 16.01.2020
Ex.P/15: True Copy of the Demand letter dated 01.01.2020 by Ansal
Bhawan Flat Owners Society;
Ex.P/16: True copy of the letter dated 22.01.2020 issued by the
Plaintiffs
Ex.P/17: True copy of the Property Tax Bill 2019-2020
Ex.P/18: True copy of Order dated 12.06.2020 in W.P. (C) No.
10395/2019;

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 Ex.P/19: True copy of Order dated 16.07.2020 in W.P. (C) No.
10395/2019;
Ex.P/20: True copy of Order dated 28.07.2020 in W.P. (C) No.
10395/2019;
Ex.P/21: True copy of Notice U/S. 80 CPC dated 09.09.2020 to the
defendants;
Ex.P/22: True copy of the reply to Notice dated 14.09.2020 by
defendant No.3
Ex. P/23: True copy of Defendant No. 1 in its Counter Affidavit in
Reply dated 05.06.2020 in response to the Writ Petition bearing
number W.P. (C) No. 10395 of 2019
Ex. P/24: True copy of the Counter Affidavit in Reply to the
Application bearing number C.M. 3099 of 2020 in W.P. (C) No.
10395 of 2019 filed by Defendant No.l
Ex. PW1/25: True copy of online property tax information showing
the latest outstanding property tax
Ex. PW1/26: True copy of Section 65 B, Evidence Act Affidavit
Ex. PW1/D1: True copy of Lease deed dated 12.02.1996
Ex.PW-2/1: True copy of Covering letter bearing No. F.SR-VII/Court
Matter/New Delhi/634 dated 06.09.2022
Ex.PW-2/2(Colly): Certified Copy of the Lease deeds of the
adjoining properties in Ansal Bhawan.
Ex. PW-3/1 (Colly): Photocopy of the letter of demand dated
26.03.2019 along with the property details (Original Seen and
Returned).

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 Ex. PW-4/1: True copy of Letter No. LDO/Conversion Cell/237
dated 18.07.2014
Ex. PW-4/2: True copy of Letter dated 10.02.2014
Ex. PW-4/3: True copy of Demand Order issued on 08.10.2013
Ex. PW-4/4: True copy of the Original Perpetual Lease dated
08.11.1930
Ex. PW4/5: True copy of letter No. Ll-9/148(56)/72 dated 25.09.1972
issued by the Government of India, Ministry of Works and Housing,
Land and Development Office, Nirman Bhawan, New Delhi

20. The defendants have examined only one witness, namely, Sh. Kiran
Pal, Deputy Director, Directorate of Estates, Ministry of Housing and Urban
Affairs, Nirman Bhawan, New Delhi, has exhibited a photocopy of OM
dated 25.08.2014 as Ex. DW/1.

ISSUE-WISE DISCUSSION
Issue no.1- Whether the occupation of the defendant No. 1 of flat
No. 1108, Ansal Bhawan, Kasturba Gandhi Marg, New Delhi-
110001, for the period 1st May, 1999 to 2nd July, 2020 was illegal?
OPP.

21. The possession of defendant Nos. 1 and 2 over the suit property from
01.05.1999 to 02.07.2020 is a matter of record and is expressly admitted by
the defendants. Learned counsel appearing for the plaintiffs has pointed out
that the factum of possession of the suit property by the defendants stands
unequivocally admitted in the pleadings as well as in the evidence placed on
record. In particular, reliance is placed on paragraph no. 40 of the written
statement filed by the defendants, wherein it is clearly stated that the flat

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 was in possession of defendant No. 2 and that no lease agreement existed
during the seizure period. Accordingly, rent was not paid until directed by
this Court. Further, in the evidence affidavit of DW-1, defendant no. 1 has
categorically stated that electricity bills for the said premises were paid by
defendant No. 2 up to November 2019, thereby affirming continued
possession of the premises during that period.
22. Moreover, learned counsel places reliance on the order dated
28.07.2020 passed in W.P. (C) No. 10395 of 2019, wherein this Court, on
the basis of an affidavit filed on behalf of defendant No. 1 herein, has
recorded a finding that rent was only paid till April 1999, and thereafter
directed defendant No.1 to pay arrears of rent from 01.05.1999 to
02.07.2020, the date on which goods were finally removed from the
premises, at the rate of Rs.20,500/- per month.
23. A perusal of the order dated 28.07.2020 passed by this Court in
W.P.(C) 10395 of 2019 unequivocally records that defendant No. 3 had
vacated and removed its belongings from the suit property only on
02.07.2020. The order dated 28.07.2020 is reproduced herein: -

“1. On 16.07.2020, this Court has passed an order recording the

statement made on behalf of respondent no.3 that it shall pay the
arrears of rent for the property in question (Flat No. 1108, Ansal
Bhawan, Kasturba Gandhi Marg, New Delhi ) on the basis of the last
rent paid to the petitioner,
2. Mr Kumar, learned counsel appearing for the petitioner had shared
a receipt, which indicated that the rent paid for the month of October,
1998 was paid at the rate of Rs.34.850/- per month. Mr Dheeraj Kumar
who had joined the proceedings on that date on behalf of Director of
Estates (respondent no.3) had sought time to verify the same and the
petition was adjourned for today.

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 3.An affidavit has been filed on behalf of respondent no.3, which
indicates that the monthly rent payable for the property in question was
Rs.20,500/- and the same was paid till April, 1999. It is affirmed that
the payments were stopped after 30.04.1999.
4. In view of the said affidavit, respondent no.3 would require to pay
the arrears of rent with effect from 01.05.1999 till 02.07.2020 being the
date of on which respondent no 3 had removed its goods from the
premises in question (Flat No. 1108, Ansal Bhawan, Kasturba Gandhi
Marg, New Delhi) at the rate of Rs.20,500/- per month. The said
payment shall be made within a period of six weeks from today.
5. It is clarified that in terms of the order dated 16.07.2020 all rights of
the parties are reserved, which includes the right, if any, of the
petitioner to claim mesne profits, compensation, interest, etc.
6.No further orders are required to be passed in this petition.
7.The petition is disposed of. All pending applications are also
disposed”

24. Thus, it is evident that the defendants retained possession of the suit
property till 02.07.2020. It may be noted that it has also been admitted that
there exists neither any documentation nor an assertion from the defendants
indicating an extension of the valid lease period beyond 25.11.1995.
25. In view of the foregoing, the only controversy that remains is whether
such an occupation was illegal. Learned counsel for the defendants has
averred that during the period when the property was forfeited, i.e, from
05.08.1998 to 28.03.2016, the plaintiffs cannot claim any benefits related to
the suit property. He has further substantiated the aforesaid submission with
reliance on the provision of Section 23 of the SAFEMA.
26. Section 23 of the SAFEMA reads as under: -
''23. Protection of action taken in good faith-
No suit, prosecution or other proceeding shall lie against the Central
Government or any officers of the Central or State Government for
anything which is done or intended to be done, in good faith in
pursuance of this Act or the rules made thereunder.”

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 27. Before dealing with the aforesaid objection raised by the defendants,
it is appropriate to first lay out the brief history of the protracted lis between
the parties.
28. Late Shri H.K. Sarin (father of plaintiff Nos.1 and 2), who was
engaged in business under the name „Sarin Gem House,‟ was subjected to
raids between 1974 and 1976, and a preventive detention order was issued
against him on 12.07.1975 under the Conservation of Foreign Exchange and
Prevention of Smuggling Activities Act, 1974 (hereinafter referred to as
COFEPOSA) by the Government of NCT of Delhi. However, the said order
was never executed, and Sh. Sarin was never detained. Thereafter, a notice
under Section 6(1) of SAFEMA was issued on 20.04.1980, calling upon Sh.
Sarin to disclose the source of income of certain properties. He filed
representations between 1981 and 1982, but no further action was taken
until 05.08.1998, when an ex parte forfeiture order was issued without a
hearing. Aggrieved with the same, Sh. Sarin filed a writ petition bearing no.
W.P. (C) No. 1124 of 1999 and also preferred an appeal, which was rejected
on 19.12.2001, after his demise on 16.10.2000.
29. Upon issuance of a subsequent show cause notice dated 29.03.2005,
another writ petition bearing W.P. (C) No. 23717 of 2005 was filed by the
legal heirs of Sh. Sarin, where, for the first time, the respondents therein
disclosed that the original detention order had been revoked on 21.03.1977,
on cessation of the Emergency. It was also stated that the detention records
were untraceable. Subsequently, the writ petition was withdrawn on
14.05.2007 with liberty to challenge the SAFEMA proceedings. A request to
drop the proceedings was rejected by the competent authority vide order

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 dated 04/08.02.2008, stating therein that a revocation under Section 11(1) of
COFEPOSA did not affect the applicability of SAFEMA. Thereafter, the
plaintiffs herein assailed the forfeiture order in a third writ petition bearing
W.P.(CRL) No. 1606/2008, contending that the detention order, made
during the Emergency and admittedly revoked upon its cessation on
21.03.1977, fell within the third proviso to Section 2(2)(b) of SAFEMA,
rendering the proceedings without jurisdiction and legally untenable.
30. The Division Bench of this Court vide judgment dated 01.12.2014,
held that the proceedings initiated under SAFEMA were without jurisdiction
and a nullity in law, as the requirement under Section 2(2)(b) of SAFEMA
was satisfied. (The proviso to Section 2(2)(b) of SAFEMA excludes its
applicability to persons whose COFEPOSA detention orders were revoked
or set aside). The Court observed that as the detention order was never
implemented and stood revoked by operation of law, the initiation and
continuation of forfeiture proceedings under SAFEMA were held to be
unsustainable, inapplicable, and without jurisdiction. Consequently, the
Court quashed the orders passed by the competent and appellate authorities
under SAFEMA and allowed the writ petition. The relevant extract is
reproduced hereinunder: -

“12. By virtue of Section 2(2) (b) of SAFEMA. jurisdiction extends to

every person against whom a COFEPOSA detention order "has been
made". However, the third proviso (to Section 2 (2) (b))specifically
excepts its operation those against whom orders of detention are made
under Section 12-A of COFEPOSA if:

(a) orders of detention are not revoked before expiry of time (for such
detention); or
(b) orders of detention are revoked on the basis of first review; or
(c) revocation of detention is on the basis of the report of the Advisory

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 Board, under Section 8 read with Section 12A (6).
Now, a detention order under Section 12A - as noticed in Amritlal
Prajivandas (supra) - was made under extraordinary circumstances,
when Fundamental Rights were suspended. The non-obstante clause in
Section 12-A overrode other safeguards which every individual was
assured before a valid detention order could be issued,
recommendation and review by Advisory Boards as essential
preconditions. Such orders made by virtue of Section 12A, importantly,
were to be in force for the duration of Emergency, i.e. till the
Proclamation lasted, or for two years (twenty four months) from the
date of the order, whichever was shorter. In the present case, the
detention order was apparently made on 12.07.1975 i.e. after the
Proclamation of Emergency was issued on 25.06.1975 Therefore, late
H.K. Sarin's detention order fell into the category of those which were
made under Section 12-A ( l ). It was to be in force, in terrns of that
provision, for the duration of the Emergency, or twenty-four months,
whichever was shorter. The Emergency was lifted and the
Proclamation rescinded on 21.03.1977; the same day, pursuant to the
mandate of Section 12-A, Shri Sarin's detention order was revoked.
These facts show that the first contingency envisioned in the third
proviso to Section 2(2) (b) of SAFEMA, "such order of detention, being
an order to which the provisions of Section 12A of the said Act apply,
has not been revoked before the expily o{ the time {or ... " was fulfilled.
In other words, the detention order of Shri Sarin was an Emergency
detention order, and ran its course and thus fell within the description
of one which had not been revoked before the expiry of its time. It was
revoked and got revoked by operation of law, upon the cessation of the
Emergency, itself, due to Section 12A (1) – of COFEPOSA
13. This court is also aware of the fact that Shri Sarin was never served
with the detention order, nor even made aware of it ever, during the
time it was in force. The respondents were unable to show any material
to say that they tried to serve it upon him, and that he could have in any
manner known of its existence, in order to challenge it. In these
circumstances, it was impossible for him to impugn it, for the period
July 1975 to March 1977. Once the Emergency was revoked, and the
detention order suffered a similar fate, there was no manner for him
again to challenge the detention order as it had no consequence.
Another very important aspect is that when the Emergency was in
force, individuals whose personal liberty was forfeited under preventive
detention laws, such as COFEPOSA, were, by reason of the
Proclamation of Emergency, prevented from asserting their
Fundamental Rights. Initially nine High Courts held notwithstanding
this position, orders of detention could be challenged under Article 226
of the Constitution of India. However, the Supreme Court held that

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 such petitions were not maintainable; effectively barring even the writ
remedy to those aggrieved against detention orders, in A.D.M Jabalpur
v Shiv Kant Shukla AIR 1976 SC 1207.
14. The submission of the respondents that the revocation order in the
present case was not under Section 12-A, but under Section 11 is of not
much consequence. The only power of revocation which could have
been sought recourse to, by the Central Government, under
COFEPOSA during Emergency, in respect of orders under Section12-
A, was under Section 12-A (3) after review and recommendation to
release the detenu. That class of detention orders too stood excluded by
virtue of Section 2 (2) (b) third proviso; however, the first category, i.e.
those detention orders that had not been revoked before cessation of
Emergency, could have been revoked only under Section 11 of
COFEPOSA
15. In the light of the foregoing discussion, it is held that the revocation
of the detention order, in the present case, clearly fell within third
proviso to Section 2 (2) (b) and was thus excluded from the exercise of
jurisdiction under SAFEMA. The writ petition has to consequently
succeed; the orders of the competent and appellate authority are
hereby quashed. The writ petition is allowed in the above terms without
any order as to costs.”

31. At this stage, it is also pertinent to note herein the decision of the
Supreme Court in Deepak Agro Foods v. State of Rajasthan 1, wherein it
has been held that where an authority or Court lacks inherent jurisdiction,
any order passed by it is void ab initio, null, and non-est, as the defect of
jurisdiction strikes at the root and cannot be cured, even with the consent of
the parties. However, it was further held that a wrongful or irregular exercise
of jurisdiction does not render an order or decree a nullity; it constitutes an
illegality, which is curable through appropriate legal proceedings. The
aforesaid finding has been rendered by the Supreme Court in paragraph nos.
17 and 19 of the aforenoted decision, which reads as under: -

1
(2008) 7 SCC 748

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 “17. All irregular or erroneous or even illegal orders cannot be held to
be null and void as there is a fine distinction between the orders which
are null and void and orders which are irregular, wrong or illegal.
Where an authority making order lacks inherent jurisdiction, such
order would be without jurisdiction, null, nonest and void ab initio as
defect of jurisdiction of an authority goes to the root of the matter and
strikes at its very authority to pass any order and such a defect cannot
be cured even by consent of the parties. (See Kiran Singh v. Chaman
Paswan [AIR 1954 SC 340] .) However, exercise of jurisdiction in a
wrongful manner cannot result in a nullity—it is an illegality, capable
of being cured in a duly constituted legal proceedings.

19.In Rafique Bibi v. Sayed Waliuddin [(2004) 1 SCC 287] explaining

the distinction between null and void decree and illegal decree, this
Court has said that a decree can be said to be without jurisdiction, and
hence a nullity, if the court passing the decree has usurped a
jurisdiction which it did not have; a mere wrong exercise of jurisdiction
does not result in a nullity. The lack of jurisdiction in the court passing
the decree must be patent on its face in order to enable the executing
court to take cognizance of such a nullity based on want of jurisdiction.
The Court further held that a distinction exists between a decree passed
by a court having no jurisdiction and consequently being a nullity and
not executable and a decree of the court which is merely illegal or not
passed in accordance with the procedure laid down by law. A decree
suffering from illegality or irregularity of procedure cannot be termed
inexcutable.”

32. In light of the legal position explicated hereinabove, a perusal of the

order of this Court dated 01.12.2014 and the order of the Government of
India dated 28.03.2016 indicates that proceedings under SAFEMA and the
forfeiture order have been nullified on the ground of lack of jurisdiction.
Consequently, the provisions of Section 23 of SAFEMA become
inapplicable under the circumstances of the present case.
33. Furthermore, a bare reading of Section 23 of SAFEMA indicates that
it only applies when an action is undertaken in good faith or in accordance
with the Act or the Rules made thereunder. So far as the action in pursuance
of the Act or Rules made thereunder is concerned, this aspect has already

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 been decided by the Division Bench of this Court, where the action was
entirely annulled as being beyond the scope of the Act and Rules.
34. More importantly, with respect to the exception of action undertaken
in good faith, it is pertinent to note that in Indian jurisprudence, the doctrine
of good faith is pivotal across multiple legal domains. Good faith
encompasses honesty in intent, equitable conduct, and adherence to
reasonable standards. It necessitates acting with probity and transparency,
abjuring deceit or exploitation of the other party. Nevertheless, good faith
cannot function as an impregnable defence. For instance, merely
demonstrating good faith does not exonerate a party from fulfilling
contractual duties or complying with statutory mandates. Invoking the
doctrine of good faith cannot shield a party from liability in instances of
contractual breach, malfeasance, or statutory violations. Consequently, while
good faith remains a cornerstone principle, it does not supersede explicit
legal obligations and responsibilities. It is only invoked when a party acts
with integrity, exhibits reasonable conduct, and anticipates equitable
treatment from the other party.
35. The doctrine of good faith is particularly significant in cases involving
the illegal occupation of land or property by governmental authorities. The
doctrine, which embodies honesty, fairness, and adherence to legal
obligations, is vital in ensuring that public authorities do not exploit their
position of power to infringe upon individual rights. Derived from the Latin
term bona fides, the doctrine mandates that actions of government entities
should be conducted with genuine intentions, devoid of any fraud or malice
and with utilitarian intentions. In instances where a governmental authority
claims good faith in the occupation of an individual's property, it must

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 convincingly demonstrate that such occupation was based on an honest
belief of legal or statutory entitlement, and not marred by any malicious
intent.
36. The Bombay High Court has illustrated the application of this
doctrine in the case of Kailas Sizing Works v. Municipality of Bhivandi
and Nizampur2. The Court delineated the contours of acting in good faith,
emphasising the necessity of honesty, fairness, and uprightness in
governmental conduct. The Court copiously stated that deliberate negligence
or conscious injury to others negates the claim of good faith, highlighting
the expectation that governmental actions must always align with principles
of fairness and reasonableness. The relevant extract of the aforenoted
decision reads as under: -
“.. In order to act in good faith, a person must act honestly. A person
cannot be said to act honestly unless he acts with fairness and
uprightness. A person who acts in a particular manner in the discharge
of his duties in spite of the knowledge and consciousness that injury to
someone or group of persons is likely to result from his act or omission
or acts with wanton or wilful negligence in spite of such knowledge or
consciousness cannot be said to act with fairness or up-rightness and,
therefore, he cannot be said to act with honesty or in good faith.
Whether in a particular case a person acted with honesty or not will
depend on the facts of each case. If, for example, with a view to
construct a road a municipality wishes to blast a rock with dynamite
near a town and acts against expert opinion that the town is within the
range of harm, and the rock should be removed by quarrying it cannot
be said to act honestly if it proceeds to blast the rock. It can also not be
said to act honestly if it proceeds to blast the rock without taking expert
advice. If it refuses to see light and hides its face from the light it would
be acting with wanton and wilful negligence and its negligence coupled
with want of honesty and good faith would be actionable. In the matter
before us it is common ground that in laying the slab complained of the
defendants were carrying out a duty authorised by Section 54(1 )(i) of
the Act. But if they carried out the said duty with the knowledge of

2
AIR 1969 Bom 127

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 demolition of Varala Dam up to a height of six feet and with such
knowledge narrowed the nullah or allowed the centring to remain and
to obstruct the passage of bushes and debris, they would not be said to
act honestly. In such case, they knew and ought to have known that the
constructed water passage would not be sufficient to carry the water
coming from the additional catchment area and the centring would
obstruct the passage of bushes and debris brought by the increased
velocity of water.”

37. Furthermore, in the context of the law of contracts, where the doctrine
of good faith finds its foundational basis, the Supreme Court, in the case of
Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly3,
adjudicated that a contractual clause permitting the employer to terminate
the employment of a permanent employee without cause was capricious and
contravened the principle of good faith.
38. Coming back to the facts of the instant case, it is observed that
possession of the suit property was restored to the plaintiffs on 02.07.2020,
i.e., seven years after the forfeiture order was quashed and the defendants'
actions were adjudged to be without any jurisdiction by the Division Bench
of this Court.
39. It is, thus, seen that in the absence of any bona fide conduct or
reasonable explanation being offered by the defendants for their continuous
possession of the property in question up to 02.07.2020 without paying the
rent, either as per the lease deed or after the expiry of the lease deed as per
the market rate would not be amenable to be protected under the doctrine of
good faith.
40. Moreover, it may be further noted that the lease agreements executed
between the parties stood terminated on 25.11.1995, and no new lease was

3
1986 (3) SCC 156

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 executed in favour of the defendants by the plaintiffs thereafter.
Furthermore, it is an admitted position that the defendants were in
possession of the suit property during the period of 01.05.1999 to
02.07.2020, and the same admission also stood recorded by the Court in the
order dated 28.07.2020. Therefore, it is noted that the defendants' continued
occupation of the suit property even after the quashing of the proceedings
under SAFEMA, does not exhibit any bona fide and good faith on the part of
the defendants.
41. In view of the aforementioned elucidation, the Court concludes that
the possession and occupation of the suit property by the defendants cannot
be justified under the provisions of Section 23 of SAFEMA. Holding
otherwise would mean stretching the doctrine of good faith to an extent
where an illegal action which has already been found to be impermissible in
law would be impliedly approved by this Court.
42. More importantly, the Court is conscious of the fact that immovable
property, for an individual, is not merely a corporeal asset or a physical
manifestation of ownership. It constitutes a fundamental pillar of economic
security, social identity, and personal dignity. The right to property, though
no longer a fundamental right post the 44th Amendment to the Constitution,
continues to occupy a sacrosanct position within the democratic framework
as a constitutional and legal right under Article 300-A of the Constitution.
The said Article stipulates that no person shall be deprived of their property
except by authority of law. It is a dynamic constitutional safeguard that
strikes a delicate balance between the sovereign power of the State and the
proprietary rights of individuals. The provision embodies the principles of
the rule of law, procedural fairness, and non-arbitrariness, mandating that

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 any deprivation of property must be sanctioned by law and carried out in a
just and equitable manner.
43. Furthermore, the judiciary, as the ultimate guardian of constitutional
values, has the corresponding onus to protect the constitutional, statutory
and legal rights of the citizens. The Court in a catena of decisions, have
consistently held that property rights cannot be interfered with except by
authority of law. In K.T. Plantation Pvt. Ltd. v. State of Karnataka 4, the
Supreme Court held that the right to property, once enshrined as a
fundamental right under the Constitution and intrinsically linked to the
rights to life and liberty, has since been downgraded to a statutory right
following the 44th Amendment. Drawing from philosophical and
constitutional traditions, including the theories of philosophers like Grotius,
Locke, Pufendorf, Rousseau, and Blackstone, the Court traced the evolution
of the doctrine of eminent domain, which permits State acquisition of private
property for a public purpose, subject to just compensation. The relevant
extract of the aforesaid decision is reproduced hereinunder: -
“131. Right to life, liberty and property were once considered to be
inalienable rights under the Indian Constitution, each one of these
rights was considered to be inextricably bound to the other and none
would exist without the other. Of late, right to property parted company
with the other two rights under the Indian Constitution and took the
position of a statutory right. Since ancient times, debates are going on
as to whether the right to property is a “natural” right or merely a
creation of “social convention” and “positive law” which reflects the
centrality and uniqueness of this right. Property rights at times are
compared to right to life which determine access to the basic means of
sustenance and considered as prerequisite to the meaningful exercise of
other rights guaranteed under Article 21.

4
(2011) 9 SCC 1

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 132. Eminent thinkers like Hugo Grotius, Pufendorf, John Locke,
Rousseau and William Blackstone had expressed their own views on the
right to property. Lockean rhetoric of property as a natural and
absolute right but conventional in civil society has, its roots in Aristotle
and Aquinas, for Grotius and Pufendorf property was both natural and
conventional. Pufendrof, like Grotius, never recognised that the rights
to property on its owners are absolute but involve definite social
responsibilities, and also held the view that the private property was
not established merely for the purpose of “allowing a man to avoid
using it in the service of others, and to brood in solitude over his hoard
of riches.” Like Grotius, Pufendorf recognised that those in extreme
need may have a right to the property of others. For Rousseau,
property was a conventional civil right and not a natural right and
private property right was subordinate to the public interest, but
Rousseau insisted that it would never be in the public interest to violate
them.
133. With the emergence of modern written constitutions in the late
eighteenth century and thereafter, the right to property was enshrined
as a fundamental constitutional right in many of the constitutions in the
world and India was not an exception. Blackstone declared that so
great is the regime of the law for private property that it will not
authorise the least violation of it—no, not even for the general good of
the whole community. Writings of the abovementioned political
philosophers had also its influence on the Indian Constitution as well.
Eminent domain
134. Hugo Grotius is credited with the invention of the term “eminent
domain” (jus or dominium eminens) which implies that public rights
always overlap with private rights to property, and in the case of public
utility, public rights take precedence. Grotius sets two conditions on the
exercise of the power of eminent domain: the first requisite is public
advantage and then compensation from the public funds be made, if
possible, to the one who has lost his right. Application of the above
principle varies from countries to countries. German, American and
Australian Constitutions bar uncompensated takings. Canada's
Constitution, however, does not contain the equivalent of the taking
clause, and eminent domain is solely a matter of statute law. The same
is the situation in the United Kingdom which does not have a written
constitution as also now in India after the Forty-fourth Constitution
Amendment.
144. The above theoretical aspects of the doctrine have been
highlighted only to show the reasons, for the inclusion of the principle
of eminent domain in the deleted Article 31(2) and in the present

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 Article 30(1-A) and in the second proviso of Article 31-A(1) of our
Constitution and its apparent exclusion from Article 300-A.
145. Our Constitution-makers were greatly influenced by the Western
doctrine of eminent domain when they drafted the Indian Constitution
and incorporated the right to property as a fundamental right in Article
19(1)(f), and the element of public purpose and compensation in Article
31(2). Of late, it was felt that some of the principles laid down in the
directive principles of State policy, which had its influence in the
governance of the country, would not be achieved if those articles were
literally interpreted and applied.
146. The directive principles of the State policy lay down the
fundamental principles for the governance of the country, and through
those principles, the State is directed to secure that the ownership and
control of the material resources of the community are so distributed as
best to subserve the common good and that the operation of the
economic system does not result in the concentration of wealth and
means of production to the common detriment. Further, it was also
noticed that the fundamental rights are not absolute but subject to law
of reasonable restrictions in the interest of the general public to
achieve the above objectives specially to eliminate zamindari system.”

44. Furthermore, the Court held that Article 300-A of the Constitution
also protects an individual's right to property against arbitrary executive
action. The Court observed that public purpose is an indispensable
requirement for any legislation that authorizes deprivation of property. It
drew upon the doctrine of eminent domain and held that although Article
300-A of the Constitution does not explicitly incorporate this doctrine, its
principles are implicitly embedded within the provision. Any law which
authorises deprivation of property for a primarily private interest, or where
public interest is incidental, would be unconstitutional and liable to be struck
down upon judicial review.
45. The Court further reiterated that executive authority must conform to
the principles of reasonableness and non-arbitrariness, in line with broader
constitutional values. The mere existence of a law is not sufficient; the law

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 must be reasonable, proportionate, and not excessive in its restriction of
property rights. The Court clarified that failure to comply with the statutory
provisions authorising deprivation, whether procedural or substantive, would
result in a violation of Article 300-A. The relevant extracts of the decision in
K.T. Plantation Pvt. Ltd are reproduced hereinunder: -
168. Article 300-A proclaims that no person can be deprived of his property
save by authority of law, meaning thereby that a person cannot be deprived
of his property merely by an executive fiat, without any specific legal
authority or without the support of law made by a competent legislature. The
expression “property” in Article 300-A confined not to land alone, it
includes intangibles like copyrights and other intellectual property and
embraces every possible interest recognised by law.
170. Article 300-A, therefore, protects private property against executive
action. But the question that looms large is as to what extent their rights will
be protected when they are sought to be illegally deprived of their properties
on the strength of a legislation. Further, it was also argued that the twin
requirements of “public purpose” and “compensation” in case of
deprivation of property are inherent and essential elements or ingredients,
or “inseparable concomitants” of the power of eminent domain and,
therefore, of List III Entry 42, as well and, hence, would apply when the
validity of a statute is in question.
178. The principles of eminent domain, as such, are not seen incorporated in
Article 300-A, as we see, in Article 30(1-A), as well as in the second proviso
to Article 31-A(1) though we can infer those principles in Article 300-A. The
provision for payment of compensation has been specifically incorporated in
Article 30(1-A) as well as in the second proviso to Article 31-A(1) for
achieving specific objectives. The Constitution (Forty-fourth Amendment)
Act, 1978 while omitting Article 31 brought in a substantive provision clause
(1-A) to Article 30. Resultantly, though no individual or even educational
institution belonging to majority community shall have any fundamental
right to compensation in case of compulsory acquisition of his property by
the State, an educational institution belonging to a minority community shall
have such fundamental right to claim compensation in case the State enacts
a law providing for compulsory acquisition of any property of an
educational institution established and administered by a minority
community. Further, the second proviso to Article 31-A(1) prohibits the
legislature from making a law which does not contain a provision for
payment of compensation at a rate not less than the market value which

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 follows that a law which does not contain such provision shall be invalid
and the acquisition proceedings would be rendered void.”
Public purpose
180. Deprivation of property within the meaning of Article 300-A, generally
speaking, must take place for public purpose or public interest. The concept
of eminent domain which applies when a person is deprived of his property
postulates that the purpose must be primarily public and not primarily of
private interest and merely incidentally beneficial to the public. Any law,
which deprives a person of his private property for private interest, will be
unlawful and unfair and undermines the rule of law and can be subjected to
judicial review. But the question as to whether the purpose is primarily
public or private, has to be decided by the legislature, which of course
should be made known.
181. The concept of public purpose has been given fairly expansive meaning
which has to be justified upon the purpose and object of the statute and the
policy of the legislation. Public purpose is, therefore, a condition precedent,
for invoking Article 300-A.”

46. Therefore, the State, being a constitutional authority and repository of

public trust, is duty-bound to protect, rather than transgress, the civil rights
of its citizens, including the right to property. The powers of the State are
not plenary or absolute but are circumscribed by constitutional and statutory
limitations. Any executive or legislative action that seeks to divest a citizen
of property without due process, in the absence of an enabling law, would
fall foul of Article 300-A and render such action void ab initio.

47. It is, thus, imperative that actions of the State, particularly those
involving the deprivation or restriction of immovable assets, be subjected to
strict judicial scrutiny. The State must not only comply with the letter of the
law but also act in a manner that is fair, just, and equitable. Executive
overreach beyond the four corners of the law must be met with
constitutional censure, for when the protector of rights becomes the violator,
the very fabric of the rule of law is imperiled. In a constitutional democracy

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 governed by the principles of justice, equity, and good conscience, the
preservation of legal rights such as that of proprietary must remain an
unyielding commitment of the State.
48. It is thus seen that the plaintiffs have been able to sufficiently
establish that the occupation of defendant no.1 over the suit property for the
period from 01.05.1999 to 02.07.2020 was illegal. Therefore, issue no.1 is
decided in favour of the plaintiffs and against the defendants.
Issue no.2 - Whether the plaintiffs are entitled to a sum of
Rs.2,20,70,954/- towards damages, mesne profits and loss of
market rent for the period May, 1999 to 2nd July, 2020 on
account of such illegal occupation? OPP
Issue no. 6: Whether the sum of RS. 52,08,323/- was towards
full and final settlement of the dues, as claimed by the
Defendants? OPD
Issue no. 7: Whether the plaintiffs are entitled to interest? If
so, at what rate and for what period? OPP

49. A cumulative examination of the facts and orders passed during the
legal proceedings between the parties has further demonstrated that the
occupation of the defendants became illegal after the termination of the last
lease agreement from 01.05.1999 as held, hereinabove, while adjudicating
on issue no.1. It has also been noted that the Court vide order dated
28.07.2020 directed defendant No.1 to hand over the possession of the suit
property and to pay the arrears of rent from 01.05.1999 to 02.07.2020, based
on the last admitted rent i.e. Rs.20,500/- per month.
50. As noted earlier, the plaintiffs have sought threefold damages under
the heads of mesne profits, maintenance charges and outstanding property
tax, in respect of the suit property.

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 51. With regard to relief of mesne profits, learned counsel for the
plaintiffs submits that mesne profits are recoverable under Code of Civil
Procedure, 1908 (hereinafter referred to as CPC), as a compensatory
remedy intended to place the dispossessed owner in the financial position,
they would have occupied had possession not been unlawfully withheld. He
submits that the suit property is a valuable commercial unit situated in a
prime location in Delhi, and as such, has the inherent potential to yield
substantial rental income. Learned counsel has also placed on record 19
registered lease deeds of comparable commercial premises in the same
building for the years 2005 to 2020, to establish the prevailing market rent.
It is further submitted that for the period prior to 2005, the plaintiffs have
applied a 15% annual escalation on the last paid rent, in accordance with the
settled principles. Therefore, it is submitted that the plaintiffs are entitled to
recover mesne profits to the tune of Rs. 1,90,54,953.56/- (as per the
calculations provided by plaintiffs) for the period of unauthorized
occupation.
52. It may be noted that learned counsel for the defendants have neither
challenged the method of computation in their pleadings nor raised any
objection during cross-examination.
53. The Supreme Court in N. Nagendra Rao & Co. v. State of A.P 5 has
held that the doctrine of sovereign immunity cannot be invoked where the
State or its officers act negligently in discharge of their statutory duties or
interfere unlawfully with the life, liberty, or property of citizens. The Court
distinguished between acts of State performed in the exercise of sovereign
authority, such as in war or diplomacy, and ordinary governmental

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 functions.
54. It was emphasized that while the State may remain immune from suit
in relation to core sovereign functions, such as foreign affairs, defence, and
the administration of justice, such immunity does not extend to negligent
acts committed by State officials in the exercise of the purported statutory
duties. The Court further held that public interest and the rule of law require
that the State be held accountable like any other juristic person when it
unlawfully deprives a citizen of property or causes injury through
negligence. The Court further held that where statutory powers are exercised
negligently, particularly in the context of administrative or commercial
regulation, the State is vicariously liable for the acts of its officers. The
relevant extract of the aforenoted judgment is reproduced hereinunder: -
“25. But there the immunity ends. No civilised system can permit an
executive to play with the people of its country and claim that it is
entitled to act in any manner as it is sovereign. The concept of
public interest has changed with structural change in the society.
No legal or political system today can place the State above law as
it is unjust and unfair for a citizen to be deprived of his property
illegally by negligent act of officers of the State without any remedy.
From sincerity, efficiency and dignity of State as a juristic person,
propounded in nineteenth century as sound sociological basis for
State immunity the circle has gone round and the emphasis now is
more on liberty, equality and the rule of law. The modern social
thinking of progressive societies and the judicial approach is to do
away with archaic State protection and place the State or the
Government on a par with any other juristic legal entity. Any
watertight compartmentalization of the functions of the State as
“sovereign and non-sovereign” or “governmental and non-
governmental” is not sound. It is contrary to modern
jurisprudential thinking. The need of the State to have
extraordinary powers cannot be doubted. But with the conceptual
change of statutory power being statutory duty for sake of society
and the people the claim of a common man or ordinary citizen

5
(1994) 6 SCC 205

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 cannot be thrown out merely because it was done by an officer of
the State even though it was against law and negligent. Needs of the
State, duty of its officials and right of the citizens are required to be
reconciled so that the rule of law in a Welfare State is not shaken.
Even in America where this doctrine of sovereignty found its place
either because of the “financial instability of the infant American
States rather than to the stability of the doctrine's theoretical
foundation”, or because of “logical and practical ground”, or that
“there could be no legal right as against the State which made the
law” gradually gave way to the movement from, “State
irresponsibility to State responsibility”. In Welfare State, functions
of the State are not only defence of the country or administration of
justice or maintaining law and order but it extends to regulating
and controlling the activities of people in almost every sphere,
educational, commercial, social, economic, political and even
marital. The demarcating line between sovereign and non-
sovereign powers for which no rational basis survives has largely
disappeared. Therefore, barring functions such as administration of
justice, maintenance of law and order and repression of crime etc.
which are among the primary and inalienable functions of a
constitutional Government, the State cannot claim any immunity.
The determination of vicarious liability of the State being linked
with negligence of its officers, if they can be sued personally for
which there is no dearth of authority and the law of misfeasance in
discharge of public duty having marched ahead, there is no
rationale for the proposition that even if the officer is liable the
State cannot be sued. The liability of the officer personally was not
doubted even in Viscount Canterbury [1 PH 306 : 41 ER 648] . But
the Crown was held immune on doctrine of sovereign immunity.
Since the doctrine has become outdated and sovereignty now vests
in the people, the State cannot claim any immunity and if a suit is
maintainable against the officer personally, then there is no reason
to hold that it would not be maintainable against the State.

27. A law may be made to carry out the primary or inalienable

functions of the State. Criminal Procedure Code is one such law. A
search or seizure effected under such law could be taken to be an
exercise of power which may be in domain of inalienable function.
Whether the authority to whom this power is delegated is liable for
negligence in discharge of duties while performing such functions is
a different matter. But when similar powers are conferred under
other statute as incidental or ancillary power to carry out the
purpose and objective of the Act, then it being an exercise of such
State function which is not primary or inalienable, an officer acting
negligently is liable personally and the State vicariously.

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 Maintenance of law and order or repression of crime may be
inalienable function, for proper exercise of which the State may
enact a law and may delegate its functions, the violation of which
may not be sueable in torts, unless it trenches into and encroaches
on the fundamental rights of life and liberty guaranteed by the
Constitution. But that principle would not be attracted where
similar powers are conferred on officers who exercise statutory
powers which are otherwise than sovereign powers as understood
in the modern sense. The Act deals with persons indulging in
hoarding and black marketing. Any power for regulating and
controlling the essential commodities and the delegation of power
to authorised officers to inspect, search and seize the property for
carrying out the object of the State cannot be a power for negligent
exercise of which the State can claim immunity. No constitutional
system can, either on State necessity or public policy, condone
negligent functioning of the State or its officeRs. The rule was
succinctly stated by Lord Blackburn in Geddis v. Proprietors of
Bonn Reservoir [(1878) 3 AC 430, 435] :
“No action will lie for doing that which the Legislature has
authorised, if it be done without negligence, although it does
occasion damage to anyone; but an action does lie for doing that
which the Legislature has authorised if it be done negligently.”

55. In view of the foregoing, the Court finds merit in the submissions
advanced on behalf of the plaintiffs. It is noted that the defendants herein are
authorities under the Government of India, thus forming a part of the State.
It is well settled that a property owner is entitled to claim compensation for
unlawful deprivation of possession of immovable property, and such a
remedy is available even in cases where the impugned forfeiture has been
held to be without jurisdiction. In the present case, it already stands
conclusively established that the suit property remained in the unlawful
possession of the defendants from 01.05.1999 to 02.07.2020.
56. With respect to the submissions advanced by the defendants regarding
the payment of Rs. 52,08,323/- towards discharge of alleged dues payable to
the plaintiffs, this Court finds, upon a plain reading of the order dated

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 28.07.2020, that the said amount pertains exclusively to arrears of rent
computed at the rate of last rent paid, as mutually agreed between the
parties. The payment, as recorded, was confined to undisputed liabilities and
did not envisage any escalation in rent that may have accrued during the
period of unauthorized/ illegal occupation of the suit property. It is further
evident that the aforesaid amount was devoid of any interest component,
which would ordinarily be payable in view of the prolonged dispossession of
the plaintiffs and the continued deprivation of their proprietary and
possessory rights. The Court, therefore, is of the view that the said payment
cannot be construed as a full and final settlement of all claims arising from
the unlawful occupation of the suit property. Additionally, the Court notes
that the payment made does not compensate the plaintiffs for the
consequential loss of income, business opportunity, or commercial use that
they would have otherwise been entitled to but for the defendants‟ continued
and illegal possession of the suit property.
57. As defined under Section 2(12) of CPC, mesne profits encompass the
actual or reasonably expected income/profit derived from a property during
unauthorized occupation/wrongful possession, excluding gains from
improvements made by the occupant, but including interest. This Court in
6
Phiraya Lal Alias Piara Lal v. Jia Rani, distinguished between mesne
profits and general damages under tort or contract law. The relevant extract
of the aforesaid decision is reproduced hereinbelow: -

“QUESTION NO. 2:—

6
1972 SCC OnLine Del 46

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 The claim in the suit by Jia Rani against the appellants was firstly for
possession and secondly for damages for use and occupation of the site
in suit wrongfully by the defendants appellants. When damages are
claimed in respect of wrongful occupation of immovable property on
the basis of the loss caused by the wrongful possession of the trespasser
to the person entitled to the possession of the immovable property,
these damages are called “mesne profits”. The measure of mesne
profits according to the definition in section 2(12) of the Code of Civil
Procedure is “those profits which the person in wrongful possession of
such property actually received or might with ordinary diligence have
received therefrom, together with interest on such profits”. It is to be
noted that though mesne profits are awarded because the rightful
claimant is excluded from possession of immovable property by a
trespasser, it is not what the original claimant loses by such exclusion
but what the person in wrongful possession gets or ought to have got
out of the property which is the measure of calculation of the mesne
profits. (Rattan Lal v. Girdhari Lal, AIR 1972 Delhi 11). (5) This basis
of damages for use and occupation of immovable property which are
equivalent to mesne profits, is different from that of damages for tort or
breach of contract unconnected with possession of immovable property.
Section 2(12) and Order XX Rule 12 of the Code of Civil Procedure
apply only to the claims in respect of mesne profits but not to claims for
damages not connected with wrongful occupation of immovable
property. The measure for the determination of the damages for use
and occupation payable by the appellants to the respondent Jia Rani is,
therefore, the profits which the appellants actually received or might
with ordinary diligence have received from the property together with
interest on such profits.”

58. Further, in determining the quantum of mesne profits payable by a

tenant in unlawful possession post-termination of tenancy, this Court in
M.C. Agrawal HUF v. Sahara India & Ors7, reiterated that such profits
must be assessed in accordance with Section 2(12) of CPC. The aforenoted
provision restricts mesne profits to the reasonable market rental value that
could have been obtained with ordinary diligence, excluding speculative or
punitive amounts such as contractual penalties or additional liabilities.
Further, in the absence of specific evidentiary proof regarding prevailing

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 rental rates in the locality of the suit property therein, the Court invoked
Sections 114 and 57 of the Indian Evidence Act, 1872, to take notice of a
general upward trend in urban commercial rental values in prime areas.
Accordingly, mesne profits were awarded at a compounded escalation of
15% per annum over the last contractual rent, with each subsequent year
witnessing a 15% increment over the previous year‟s assessed mesne profit.
The Court noted that such an approach has been upheld by the Division
Bench in S. Kumar v. G.R. Kathpalia8 and serves as a pragmatic and sound
methodology for estimating compensation in the absence of concrete market
data, ensuring that the landlord is compensated fairly while preventing
arbitrary enrichment.
59. The Court, in assessing the appropriate principles for determining
mesne profits, also takes cognizance of the decision in the case of Fateh
Chand v. Balkishan Dass9 wherein, the Supreme Court held that mesne
profits, as defined under Section 2(12) of the CPC must reflect the value of
the user of the property to the person in wrongful possession and should not
be arbitrarily computed based on an estimated return on the capital value of
the property. In the aforenoted decision, the reliance by the High Court on
only a percentage of the value of the property was rejected by the Supreme
Court, and the Court modified the rate of actual comparable rent while also
awarding interest at the rate of 6% accruing on the amount due month after
month.
60. Further clarity was brought in Atma Ram Properties Pvt. Ltd. v.

7
2011 SCC OnLine Del 3715
8
1998 SCC OnLine Del 553
9
1963 SCC OnLine SC 49

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 10
Federal Motors Pvt. Ltd. where the Supreme Court held that mesne
profits or compensation for use and occupation post-eviction decree should
be calculated based on the market rent the landlord could have fetched had
the tenant vacated the premises.
61. Consequently, the unlawful occupation of the suit property by the
defendants herein entitles the plaintiffs to seek mesne profits as a form of
damages, in line with the mentioned provisions and precedents.
62. In calculating mesne profits, the table below, placed on record by
learned counsel for the plaintiffs, outlines year-wise breakdown of lease
payments and a consistent annual statutory escalation of 15% (reference to
M.C. Agrawal HUF) applied to the lease amount, starting from the financial
year 1999-2000, which is when the defendants ceased paying rent, to
financial year 2004 -2005: -
Year Rent Amount Rent amount Arrears of
in INR per after 15 % lease payable
month escalation per annum
1999- 20,500/- (as 23,575/- 2,82,900/-
2000 recorded in
various
proceeding
before the
Court)
2000- 23,575/- 27,111.25/- 3,25,335/-
2001
2001- 27,111.25/- 31,177.94/- 3,74,135.28/-
2002
2002- 31,177.94/- 35,854.63/- 4,30,255.56/-
2003
2003- 35,854.63/- 41,232.82/- 4,94,793.84/-
2004
2004- 41,232.82/- 47,417.74/- 5,69,012.88/-
2005
Total RS. 24,76,432.56/-

10
(2005) 1 SCC 705

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 63. Additionally, the learned counsel for the plaintiffs has placed on
record the details of the rental/lease amount per annum, paid for the
adjoining properties to the suit property in the locality of Ansal Bhawan,
New Delhi. It is seen that PW-2, i.e, Mr Shankar Singh, MTS, office of Sub
Registrar-VII, INA, Vikas Sadan, DDA, New Delhi, has produced the
certified true copies of 19 lease deeds pertaining to the properties analogous
to the suit property, for the period spanning from 2005 to 2020. It is also
seen that the details of these lease deeds are enumerated in the covering
letter bearing No. F.SR-VII/Court Matter/New Delhi/634 dated 06.09.2022
(exhibited as Ex.PW-2/1) and certified copies of the lease deeds are also
placed on record (exhibited as Ex.PW-2/2 (Colly)). A tabulated form of the
same is reproduced below: -
S.No Properties in Lease years Area Lease per
Ansal (sq. annum
Bhawan, 16 f.t) (RS.)
Kasturba
Gandhi Marg,
New Delhi
1. Flat No. 104 13 July 2005 393 2,64,000/-
2. Flat No. 603 28 November 1,043 17,52,240/-
2006
3. Flat No. 705 10 December 820 24,60,000/-
2007
4. Flat No. 14, 22 August 721 2,59,560/-
Lower Basement 2008
Godown
5. Flat No. 601 23 March 780 5,90,400/-
2009
6. Flat No. 205 26 March 820 13,20,000/-
2010
7. Flat No. 212 11 April 2011 740 14,20,800/-
8. Flat No. 707 24 February 780 10,80,000/-
2012
9. Flat No. 1010 14 March 1,043 20,65,140/-

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 2013
10. Flat No. 906 6 January 740 13,20,000/-
2014
11 Flat No. 207 27 January 780 14,97,600/-
2014
12 Flat No. 14, 7 January 721
Lower Basement 2015 3,11,472/-
Godown
13. Flat No. 110 8 February 920 18,00,000/-
2016
14. Flat No. 1009 13 January 1,235 21,60,000/-
2017
15. Flat No. 1110 23 March 1,043 19,80,000/-
2017
16. Flat No. 807 5 January 780 15,91,200/-
2018
17. Flat No. 709 12 February 1,043 19,02,432/-
2018
18. Flat No. 1102 04 February 918 15,24,000/-
2019
19. Flat No. 121 18 February 650 13,80,000/-
2020
Total RS. 2,17,86,844/-

64. Therefore, the total mesne profits claimed by the plaintiffs are
tabulated as under: -

Particulars Amount

Total of lease amount payable from 1999 RS. 24,76,432.56/-

to 2005

Total of lease amount payable from 2005 RS. 2,17,86,844/-

to 2020

Total mesne profit payable RS. 2,42,63,276.56/-

Amount received in the Writ Petition as RS. 52,08,323/-

arrears of rent (to be deducted from total
amount payable)

Total mesne profits payable RS. 1,90,54,953.56/-

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 65. It is seen that the aforesaid computation does not furnish a holistic and
comparative assessment of the mesne profits accrued in respect of the suit
property for the period spanning from 2005 to 2020, thereby rendering the
evaluation inadequate for determining the quantum of wrongful gain or loss
occasioned during the period of illegal occupation.
66. Upon consideration of the lease deeds adduced by the plaintiffs,
delineating property areas and corresponding lease values over the period
spanning 2005 to 2020, this Court has undertaken a year-wise computation
of the per sq. ft. valuation. In doing the aforesaid exercise, it has been
noticed that lease values (s) have fluctuated drastically over the years and
there is no coherent pattern in the escalation/de-escalation of the lease
amounts(s) over the years, Thus, it is deemed appropriate to clarify that the
computation is confined strictly to the peculiar facts and circumstances of
the present case and is premised solely upon the market lease rates of
properties situated in Ansal Bhawan, as furnished by the plaintiffs. The
methodology employed herein shall not be construed as a standardized
formula for universal application across other proceedings.
67. The aforesaid exercise can be conducted by dividing the lease
amounts of each year of the properties by their area. The table below
summarises the aforesaid exercise in brevity: -
S.No. Area Lease per Year of lease Price per sq ft
(sq. annum deeds (Rs.)
f.t) (Rs.) (rounded of)

1. 393 2,64,000/- 13 July 2005 672

2. 1,043 17,52,240/- 28 November 1680.0

2006

3. 820 24,60,000/- 10 December 3000

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 2007

4. 721 2,59,560/- 22 August 2008 360

5. 780 5,90,400/- 23 March 2009 757

6. 820 13,20,000/- 26 March 2010 1610

7. 740 14,20,800/- 11 April 2011 1920

8. 780 10,80,000/- 24 February 2012 1385

9. 1,043 20,65,140/- 14 March 2013 1980

10. 740 13,20,000/- 6 January 2014 1784

11. 780 14,97,600/- 27 January 2014 1920

12. 721 3,11,472/- 7 January 2015 432

13. 920 18,00,000/- 8 February 2016 1956

14. 1,235 21,60,000/- 13 January 2017 1749

15. 1,043 19,80,000/- 23 March 2017 1898

16. 780 15,91,200/- 5 January 2018 2040

17. 1,043 19,02,432/- 12 February 2018 1824

18. 918 15,24,000/- 04 February 2019 1660

19. 650 13,80,000/- 18 February 2020 2123

68. Consequently, for the purpose of ascertaining the notional lease value
with respect to the suit property for the period spanning 2005 to 2020, the
aforenoted rate per sq. ft. may be appropriately multiplied by the total area
of the suit property to derive a fair and reasonable estimation of the lease
value of the suit property. The aforesaid exercise is further tabulated below:-
S.no. Year Price per Area of Notional rent of
sq ft (Rs.) the suit the suit property
(rounded property
of)

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 1. 13 July 2005 672 820 Rs.5,51,040
2. 28 1680.0 820 Rs.13,77,600
November
2006
3. 10 3000/- 820 Rs.24,60,000
December
2007
4. 22 August 360/- 820 Rs.2,95,200
2008
5. 23 March 757/- 820 Rs.6,20,740
2009
6. 26 March 1610/- 820 Rs.13,20,200
2010
7. 11 April 1920/- 820 Rs.15,74,400
2011
8. 24 February 1385/- 820 Rs.11,35,700
2012
9. 14 March 1980/- 820 Rs.16,23,600
2013
10. 6 January 1784/- 820 Rs.14,62,880
2014
11. 7 January 432/- 820 Rs.3,54,240
2015
12. 8 February 1956/- 820 Rs.16,03,920
2016
13. 13 January 1749/- 820 Rs.14,34,180
2017
14. 12 February 1824/- 820 Rs.14,95,680
2018
15. 04 February 1660/- 820 Rs.13,61,200
2019
16. 18 February 2123/- 820 Rs.17,40,860
2020
Total Rs.2,04,11,440.

69. The total notional lease value for the suit property, calculated by
applying the applicable rate per sq. ft. to the area of 820 sq. ft. (area of the
suit property) for each year from 2005 to 2020, amounts to Rs. 2,04,11,440/.
In addition, the plaintiffs have claimed an amount of Rs. 24,76,432.56/- as
the total notional lease payable from 1999 to 2005, based on a 15% annual

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 escalation of the lease amount. Accordingly, the aggregate notional lease
value recoverable for the entire period from 1999 to 2020 stands at Rs.
2,28,87,872.56/-. From this aggregate sum, a deduction of Rs. 52,08,323/- is
made, accounting for arrears of rent already paid by the defendants before
the Writ Court. Thus, the net mesne profits stand at Rs. 1,76,79,549.56/-
(rounded of to 1,76,79,550/-), reflecting the financial loss suffered by the
plaintiffs due to the unauthorised/illegal and prolonged occupation of the
suit property by the defendants.
70. Therefore, the plaintiffs are held entitled to mesne profits amounting
to Rs. 1,76,79,550/- to be paid by the defendants.
71. Moreover, in Fateh Chand, the Court clarified that according to
Section 2(12) of the CPC, the expression mesne profits includes not only the
profits that the person in wrongful possession actually received or could
have received with ordinary diligence but also interest on such profits.
Accordingly, the Court directed that the plaintiff therein shall be entitled to
interest at the rate of 6% per annum on the mesne profits accruing month
after month, calculated from 1.06.1949 until the date of actual delivery of
possession, subject to the statutory limitation prescribed under Order XX
Rule 12(1)(c) of CPC. The Supreme Court in Mahant Narayana Dasjee
Varu & Ors. v. The Board of Trustees, the Tirumala Tirupathi
Devasthanam,11 also held that interest is an integral part of the mesne profits
and, therefore, the same has to be allowed in the computation of mesne
profits itself.
72. In view of the defendants' continued occupation of the suit property
despite the quashing of the forfeiture order and considering the nature of the

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 protracted lis between the parties spanning over two decades, the Court finds
it appropriate to award interest at a rate of 6% per annum on the mesne
profits from the start of the illegal occupation to the date of handover, i.e.,
from 01.05.1999 to 02.07.2020.

Issue 3 Whether the Plaintiffs are entitled to a sum of Rs.

9,89,077/- (Rupees Nine Lakhs Eighty Nine Thousand and
Seventy Seven Only) towards outstanding maintenance
charges, including water charges, for the Relevant Period?
OPP

73. The plaintiffs are seeking restitution of maintenance charges levied by

Ansal Bhawan Flat Owners Welfare Society for an amount of Rs. 9,69,397/-
It is contended by the plaintiffs that the maintenance amount is towards the
facilities enjoyed by defendant Nos. 1 and 2 during their unlawful
possession over the suit property, including elevators, common areas,
security, and other infrastructure in the building.
74. Per contra, the defendants have contended that liability, if any,
pertaining to the payment of maintenance charges arises solely from the
lease agreement executed between the parties. It is asserted that, since the
said lease agreement has lapsed and is no longer subsisting, the plaintiffs
have no legal basis to claim such charges. Furthermore, it has been averred
in the written statement that defendant No.2 has already discharged the
electricity dues in respect of the suit property up to November 2019.
75. It is seen that the parties are ad idem on the fact that the last lease
deed had already expired. Furthermore, the continued occupation of the suit
property by the defendants for the period spanning from 1999 to 2020 has

11
1964 SCC OnLine SC 125

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 already been held to be unlawful, as elaborated hereinabove.
76. Accordingly, this Court is of the considered view that the possession
of the defendants, not being under a valid lease but as unlawful occupants
asserting a claim of title, cannot give rise to any contractual liability for the
payment of maintenance charges, in the absence of a fresh legal or
contractual arrangement imposing such an obligation. Even otherwise, the
plaintiffs have already been held entitled to mesne profits, which, by their
very nature, are intended to encompass any unjust enrichment derived by the
defendants to the detriment of the plaintiffs during the period of
unauthorised occupation.
77. Therefore, this Court finds that the plaintiffs are not entitled to the
claimed maintenance charges amounting to Rs 9,69,397/-.
Issue no. 4 Whether the Plaintiffs are entitled to a sum of RS.
43,53,912/- (Rupees Forty Three Lakhs Fifty Three Thousand
Nine Hundred and Twelve Only) towards outstanding
property tax for the Relevant Period? OPP
Issue no. 5 Whether the Defendants are not liable to pay
property tax, as claimed by the Plaintiffs? OPD

78. Learned counsel for the plaintiffs has also claimed restitution of
property tax on the assertion that the defendants remained in possession of
the suit property without payment of rent and, in doing so, unjustly caused
the plaintiffs to incur statutory property tax with respect to the suit property.
79. The defendants, in rebuttal, have relied upon Section 65 of the New
Delhi Municipal Council Act, 1994, which provides for the exemption of
Union Government properties from property tax.
80. It is noted that the argument of the plaintiffs that the defendants were

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 obligated to pay property tax, is devoid of merit. As noted hereinabove, it is
undisputed that the last lease agreement between the parties expired in 1995,
and there is no evidence on record to establish the existence of any valid or
subsisting lease that would place such an obligation upon the defendants.
The continued possession of the defendants, in the absence of a formal lease
or document stating that the defendants were to reimburse the property tax,
cannot automatically give rise to liability for statutory dues.
81. Moreover, it is a trite principle that property tax is a statutory burden
imposed upon the recorded owner of the property, independent of
occupancy. The plaintiffs, being the registered owners for municipal
purposes, were primarily liable for such dues. Furthermore, even according
to the unsigned lease placed on record by the defendants during the cross-
examination of PW-1, marked as Ex, PW/D1, the responsibility for paying
government taxes was assigned to the plaintiffs. Although the above
document has been objected to by the learned counsel for the plaintiff, and
the defendants admit that no lease was in effect after 1995, the obligation to
pay the property and government taxes remained with the plaintiffs as they
were the rightful owners.
82. In view of the aforesaid, the plaintiffs are not held entitled to payment
of the property tax.

RELIEF

83. As elucidated hereinabove, it is seen that issues No.1, 2 , 6 and 7 are

decided in favour of the plaintiffs and against the defendants. Further issues
No. 3, 4,5 are decided against the plaintiffs.

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 84. The suit stands decreed in terms of paragraphs No. 70 and 72. Further,
the costs of the litigation, including the counsel fees of the plaintiff, shall be
borne by the defendants.

85. Accordingly, the Registry is directed to draw a decree sheet and take
necessary steps in accordance with the law.

86. The suit, along with pending applications, stands disposed of.

(PURUSHAINDRA KUMAR KAURAV)

JUDGE
MAY, 2nd , 2025
p/dp/mj

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