Court Upholds Decision on Interest Rates for Aeroshine

The appeal was dismissed, and M/s Aeroshine was directed to deposit additional interest with DDA within four weeks. The Court upheld the calculation of unearned increase based on 1985 rates and increased the interest rate to 12% per annum.

---

---

Issues Involved:
1. Validity of the application for transfer of leasehold rights.
2. Calculation of unearned increase.
3. Interest on the unearned increase amount.

Detailed Analysis:

Issue 1: Validity of the application for transfer of leasehold rights

The appellant, Delhi Development Authority (DDA), contended that no application for permission to transfer the leasehold rights was made by the respondent, M/s Aeroshine, until the impugned order dated 31.08.2004. The respondent argued that an application was submitted on 02.07.1985. The learned Company Judge inferred that an application was indeed submitted before 16.08.1985, based on the entirety of the facts and the affidavit filed by the partner of M/s Aeroshine. The Judge concluded that the DDA was aware of the intended transfer and was involved in the proceedings since 1985. Therefore, the DDA's argument that no application was made until 2004 was dismissed.

Issue 2: Calculation of unearned increase

The learned Company Judge directed that the unearned increase should be calculated based on the application dated 02.07.1985. The DDA argued that the unearned increase should be calculated at the rates prevalent at the time of approval, which was in 2004. The respondent contended that the unearned increase should be calculated at the rates prevalent when the application was first submitted to the DDA, which was in 1985. The Judge held that the unearned increase should be calculated based on the rates as of 1985, considering the delays by the DDA in processing the application and the fact that the transfer of leasehold rights was under the aegis of the Court since 1985.

Issue 3: Interest on the unearned increase amount

The learned Company Judge awarded interest at the rate of 9% per annum on the unearned increase amount from 02.07.1985 until the date of payment. The DDA generally charges interest at the rate of 12% per annum. Considering the pendency of the litigation and the fact that the unearned increase remained unpaid for 20 years, the Court enhanced the interest rate from 9% to 12% per annum.

Conclusion:

The appeal was dismissed, and the respondent, M/s Aeroshine, was directed to deposit the additional interest amount with the DDA within four weeks. The demand made under the interim order and the documents executed pursuant thereto were to be regularized upon payment. The Court upheld the calculation of unearned increase based on the rates of 1985 and enhanced the interest rate to 12% per annum.

---