Unearned increase must be valued on the date of a complete sale permission application, not delayed approval.

Unearned increase on an industrial plot is computed by reference to the market value on the date of a complete and valid application for permission to sell, not the later date on which permission is actually granted. The note explains that the lessor's transfer policy and lease conditions require prior consent, but administrative delay cannot be used to inflate the demand. It also states that the ten-year holding period runs from the effective commencement of the lease, and that deemed approval principles under the Delhi Building Bye-Laws treat a completion notice as effective when no timely refusal is issued. The governing principles are that a party cannot be required to do the impossible and cannot take advantage of its own wrong.

---

---

Issues: Whether the lessor was entitled to compute unearned increase with reference to the date on which permission to sell was actually granted, or whether it had to be worked out with reference to the date of the petitioner's complete application seeking permission to sell the industrial plot.

Analysis: The lease conditions required prior consent for transfer and permitted recovery of fifty per cent of the unearned increase, being the difference between the premium paid and the market value at the time of sale. The policy of the lessor also required that the plot should have completed the stipulated period and, where constructed upon, that the building should have been completed three years before the application. The Court held that the ten-year period had to be counted from the effective commencement of the lease, not from the date of execution of the deed. It further held that, under the Delhi Building Bye-Laws, a completion notice not met with refusal within the prescribed period resulted in deemed approval and that the completion certificate related back to the date of completion notice. Applying these principles, the petitioner's application was treated as complete in all material particulars, and the lessor could not benefit from its own delay in dealing with that application. The legal principles that a party cannot be compelled to do the impossible and cannot take advantage of its own wrong governed the computation of unearned increase.

Conclusion: The unearned increase had to be calculated with reference to the market value prevailing on the date of the petitioner's valid application for permission to sell, not on the later date when permission was granted.

Final Conclusion: The demand based on a later valuation was set aside, the petitioner succeeded, and the lessor was directed to recompute the demand on the basis of the earlier application date and complete the transfer formalities on compliance with payment and other requirements.

Ratio Decidendi: Where a transferee's application for permission to sell is complete in all material particulars, delay by the public lessor in deciding the application cannot be used to inflate unearned increase; the relevant valuation date is the date of the valid application.

---