“Possession First” – Delhi High Court reiterates that a purchaser must return or establish transfer of possession before demanding refund, and that such contested possession issues preclude summary judgment in commercial suits

1. Introduction

Reliance Eminent Trading and Commercial Pvt. Ltd. (“Plaintiff”) bought, in a 2007 public auction, Plot No. 13 at the Jasola Non-Hierarchical Commercial Complex from the Delhi Development Authority (“DDA / Defendant”) for approximately ₹165 crores and later paid stamp duty, transfer duty and property tax. Eight years later, the original land owner, Smt. Simla Devi, succeeded in getting the 1986 acquisition proceedings declared lapsed under s.24(2) of the 2013 Land Acquisition Act. The Supreme Court confirmed the lapse on 4 May 2017, giving DDA six months to re-acquire the land – a step DDA never took.

Claiming it was forcibly dispossessed in November 2016 by persons claiming through the original owner, the Plaintiff filed a commercial suit for a money decree of nearly ₹460 crores (principal + interest). Simultaneously, it invoked Order XIII-A CPC, 2015 (summary judgment in commercial disputes), asserting that DDA had “no real prospect” of defending. DDA opposed, contending, inter alia, that:

• Possession of the plot never left the Plaintiff, and in any event the Plaintiff cannot seek refund without first tendering possession;
• The suit is time-barred;
• Alleged dispossessors (Sachin Bidhuri & others) are necessary parties.

Justice Vikas Mahajan dismissed the summary-judgment application, holding that disputed questions regarding present possession and restitution require a full trial.

2. Summary of the Judgment

The Court refused to decree the refund summarily, finding that:

• The Plaintiff’s claim hinges on whether it has returned (or can return) physical possession of the plot to DDA, or whether the original owner already holds it. This factual issue is hotly contested.
• Order XIII-A permits summary judgment only when the defendant has no real prospect of success and no other compelling reason for a trial exists. Here, triable issues on possession, limitation, and joinder clearly exist.
• The Plaintiff’s failure to implead the alleged dispossessors and its apparent inaction to protect or recover possession further undermine its plea for a quick decree.

Consequently, IA 6914/2022 (summary-judgment motion) was dismissed, and the suit will proceed to trial. Earlier interim orders directing DDA to deposit the principal amount (now under challenge) remain but the merits await evidence.

3. Analysis

3.1 Precedents Cited and their Influence

1. Bright Enterprise Pvt. Ltd. v. MJ Bizcraft (2017 SCC OnLine Del 6394) – Division Bench guidelines on procedure and temporal “window” for summary judgment under Order XIII-A.
   Influence: The Court reiterated that summary judgment is exceptional; the rigid procedural safeguards in Bright Enterprise guided scrutiny of Plaintiff’s motion.
2. Su-Kam Power Systems Ltd. v. Kunwer Sachdev (2019 SCC OnLine Del 10764) – Explained that “no real prospect” equates to “no realistic” (not fanciful) defence; permitted courts to evaluate documentary evidence without trial.
   Influence: The Court used Su-Kam’s twin requirements—(i) defendant’s prospects and (ii) presence of compelling reason for trial—to test DDA’s defence.
3. Rockwool International A/S v. Thermocare Rockwool (India) Pvt. Ltd. (2018 254 DLT 90) and M/s Jayant Industries v. Indian Tobacco Co. (2022 SCC OnLine Bom 64).
   Influence: Cited by both sides on the threshold for summary judgment; the Court adopted their conservative approach.
4. Parshadi & Ors. v. Union of India (2001) & LPA 519/2001 (2002) – earlier litigation affirming vesting of land in State.
   Influence: Demonstrated DDA’s erstwhile clean title and why auction was not initially flawed.
5. Civil Appeal 6345/2017 (DDA v. Simla Devi) – Supreme Court order of 4 May 2017 confirming lapse of acquisition and directing DDA to re-acquire within six months.
   Influence: Formed the substratum for Plaintiff’s demand, but also contained the possession-return mandate that the Court enforced against the Plaintiff.

3.2 Court’s Legal Reasoning

The decision proceeds on two doctrinal pillars:

1. Restitutio in integrum in contracts for immovable property. A purchaser who seeks rescission/refund must restore the status quo ante. Since the conveyance deed became void upon lapse of acquisition, the logical corollary is that both parties revert to their pre-transaction positions: DDA returns consideration; purchaser returns land. Unless the Plaintiff physically tenders or proves transfer of possession, an essential condition precedent remains unmet.
2. Threshold for summary judgment under Order XIII-A. While documentary evidence may prima facie favour the Plaintiff (acquisition lapsed; DDA lost title), the disputed question – who possesses the plot today? – is central to the relief. “Real prospect of defence” exists because DDA can succeed by proving the Plaintiff still holds possession or failed to discharge its restitution duty. Likewise, limitation and non-joinder defences involve mixed fact-law inquiries unsuitable for summary disposal.

3.3 Potential Impact of the Judgment

• Restitution Principle Strengthened: Purchasers of immovable property from public bodies cannot expect automatic refunds when governmental title later fails; they must concurrently or beforehand restore possession.
• Higher Bar for Order XIII-A Applications in Land/Property Disputes: Even in commercial suits (where speed is emphasised), if questions of physical possession or third-party claims exist, courts will ordinarily refuse summary adjudication.
• DDA and other planning authorities receive judicial support for insisting on contemporaneous return of land in refund/compensation cases post-acquisition lapse, helping to ensure orderly re-vesting in original owners.
• Pleading & party-joinder discipline: Plaintiffs must implead alleged dispossessors or prove their link to original title-holders; omission can be fatal to summary relief.
• Guidance on limitation computations (although left open): Raises awareness that causes of action in restitution suits may accrue either on knowledge of title cloud or on refusal to refund, not automatically on judicial declaration of acquisition lapse.

4. Complex Concepts Simplified

• Order XIII-A CPC (Summary Judgment): Introduced via the Commercial Courts Act, 2015, it allows courts to decide a commercial dispute without oral evidence if the defendant has no real prospect of success and no other compelling reason for trial exists.
• “Real prospect” vs “fanciful”: A realistic, arguable defence suffices to defeat a summary-judgment application; courts do not weigh probabilities, only plausibility.
• Lapse of acquisition (s.24(2), 2013 Act): If physical possession wasn’t taken or compensation wasn’t paid five years prior to 1-1-2014, the old acquisition automatically lapses, and land reverts to the original owner.
• Restitutio in integrum: Equitable principle requiring parties to a rescinded contract to restore each other to their original position (money for land, land for money).
• Limitation in restitution claims: The clock usually starts when the defendant refuses restitution or when the claimant first becomes aware of its right; factual determinations often needed.
• Necessary Party: A person whose presence is indispensable for an effective and complete adjudication (e.g., alleged current occupants or true owners of the land).

5. Conclusion

Reliance Eminent v. DDA offers a cautionary tale for both public authorities and sophisticated corporate purchasers: title insecurity triggered by acquisition lapses does not, without more, translate into an immediate, unqualified right to a refund. The Delhi High Court has distilled a clear rule of prudence – “possession first, refund later.” Where factual controversies persist on who currently possesses the land, courts will not short-circuit evidence through Order XIII-A.

The ruling therefore strengthens the jurisprudential framework governing summary judgments in commercial suits, emphasising that the remedy remains exceptional and must yield to contested questions of fact—particularly those entwined with equitable restitution of immovable property. Future litigants seeking quick monetary decrees must be prepared to demonstrate, not merely allege, that the property has been returned or that its return is impossible for reasons beyond their control.