New Delhi [India], August 18 : The Delhi High Court has refused to permit occupants of land allotted by the Delhi Urban Shelter Improvement Board (DUSIB) to continue in possession until completion of the fresh tender process, holding that a fixed-term licence cannot be extended indefinitely beyond the maximum six-month extension provided under the agreement.
The Division Bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tejas Karia dismissed appeals filed by Kawatra Hospitality Pvt Ltd, Kawatra Tent and Caterers Pvt Ltd and M/s Eswara Kamadhenu Restaurant Pvt Ltd, challenging orders directing them to hand over vacant and peaceful possession of the respective DUSIB lands.
The court, while rejecting the stand taken by M/s Eswara Kamadhenu Restaurant Pvt Ltd, which sought to retain possession by relying on investments allegedly made on the land and the delay in completion of the fresh tender. The Bench made it clear that such commercial considerations could not override the contractual terms, observing that the appellant had entered into the agreement with full knowledge of its duration and conditions and could not claim continuation merely to avoid financial loss.
The High Court directed the appellants to vacate the respective lands and, considering the time required to dismantle pandals and other structures, granted them an additional one week from August 10, on the same terms and conditions imposed by the Single Judge.
The court also reiterated its direction to DUSIB to complete the fresh tender process within six weeks from August 3, 2026.
The appeals arose from orders passed by the Single Judge on August 3, which had dismissed the firms' writ petitions after holding that they had no contractual, statutory or vested right to remain in occupation beyond the maximum contractual period.
The appellants argued that under Clause 6 of their agreements, they were entitled to remain in possession until the fresh auction was completed and new agreements were executed with successful bidders.
Rejecting the contention, the Division Bench held that Clause 6 contemplated extension of the agreements by DUSIB for a maximum period of six months if the fresh auction process had not been completed by expiry of the original contractual term.
The Bench noted that the appellants had already availed the entire six-month extension and therefore could not claim a further extension merely because the fresh tender process had not been completed.
The court held that accepting the interpretation advanced by the appellants would effectively convert a fixed-term licence into a licence of indefinite duration, dependent entirely upon completion of the fresh tender process.
The Bench said such an interpretation would "alter the essential term of the Agreements by rendering the tenure of the Agreement open-ended."
The court further clarified that the final part of Clause 6, which provided for the old agreements coming to an end upon execution of new agreements, would apply where DUSIB initiated and completed the fresh tender process within the six-month period contemplated under the clause.
If the process was not completed within that period, the appellants could not claim an unlimited extension until new agreements were executed.
The High Court also rejected the appellants' argument that substantial investments had been made on the respective lands and that they would suffer financial losses if asked to vacate.
The Bench observed that the appellants had voluntarily entered into the agreements "with full knowledge of their terms" and therefore could not subsequently claim a right to retain possession merely to avoid losses arising from expiry of the licence.
It held that investments made by the licensees did not confer any special right to seek extension of the licence term.
The court further observed that the likelihood of financial loss "cannot constitute a basis for extending the term of the Agreements dehors the contractual stipulations."
The Bench also rejected the plea that the appellants should be given six weeks to vacate, since DUSIB had been granted six weeks to complete the fresh tender process.
It clarified that the one-week period granted by the Single Judge was only to enable dismantling and removal of pandals and other structures and was not based on any legal right vested in the appellants to continue in occupation.
The court said the appellants therefore could not claim parity with DUSIB in relation to the time granted for completing the tender process.
Relying also on an earlier judgment concerning substantially similar contractual clauses, the Bench noted that a licensee does not acquire any proprietary or vested right merely because investments have been made on the land, and contractual stipulations cannot be disregarded merely because expiry of the licence may have commercial consequences.
Finding no infirmity in the Single Judge's judgments, the Division Bench held that the appellants had "failed to make out any ground warranting interference."
The appeals were accordingly dismissed, with no order as to costs. The court also reiterated DUSIB's direction to conclude the fresh tender process within six weeks from August 3, 2026.
The one-week period granted by the court for vacating the respective lands also came to an end on August 17, 2026. Accordingly, the appellants were required to have vacated the DUSIB land by August 17, after availing the additional time granted by the Division Bench for dismantling and removing the pandals and other structures. This is consistent with the order, which granted one additional week from August 10, 2026.