Delhi Court Refuses Stay to Race Club, Holds Rent Payment Does Not Renew Lease

New Delhi: The Court of the Principal District & Sessions Judge, New Delhi District, Patiala House Courts, has dismissed an application filed by Delhi Race Club (1940) Ltd. seeking interim stay of an eviction order passed against it under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, holding that the appellant had failed to make out a prima facie case for stay.

Principal District & Sessions Judge Pitamber Dutt was hearing an appeal under Section 9 of the Public Premises Act challenging the order passed by the Estate Officer declaring the appellant an unauthorised occupant. The application for pre-ponement of the hearing on the interim stay application was allowed pursuant to liberty granted by the Hon'ble Supreme Court of India while dismissing the appellant's SLP (C) No. 29238/2026 on 25.08.2026.

Senior Advocate Sh. Suhail Dutt, appearing for the appellant, contended that the impugned order violated the principles of natural justice since the Estate Officer had failed to supply a copy of the plaint despite repeated requests. It was further contended that the proceedings were barred by res judicata, as an earlier show cause notice dated 15.10.1999 issued on the same ground had already been quashed by the Delhi High Court in 2012. It was also argued that a sum of Rs. 3,48,82,723 deposited by the appellant on 23.08.2013, pursuant to the respondent's demand, had resulted in extension of the lease by conduct of the parties, and that the appellant's consistent payment of use and occupation charges showed that its possession could not be termed unauthorised.

Sh. Ashish K. Dixit, learned CGSC for the respondent, submitted that no lease or extension had been executed after 1994 and that the appellant's occupation thereafter was only on a month-to-month basis. It was contended that the copy of the plaint had, in fact, been duly supplied, but that the appellant, despite being granted several opportunities, had failed to file its reply, compelling the Estate Officer to close its right to do so. Reliance was placed on Delhi Development Authority v. Anand Raj Agencies Private Limited, (2016) 11 SCC 406, and Union of India v. S.M. Aggarwal & Ors., 1995 (33) DRJ (DB), for the proposition that mere payment of rent after expiry of a lease does not amount to its renewal.

On perusing the record of the Estate Officer, the Court found that the appellant's representative had repeatedly sought adjournments on 04.06.2026, 29.06.2026, 10.07.2026 and 24.07.2026 for filing a reply and evidence, but had failed to do so even by 07.08.2026, following which the Estate Officer reserved the matter for orders. Rejecting the plea of denial of natural justice, the Court noted that the order sheet dated 27.04.2026, signed by the appellant's Secretary and legal representative, itself recorded that the copy of the plaint had been supplied, and that no further request in this regard was made on any subsequent date.

Relying on the Delhi High Court's observations in Union of India v. S.M. Aggarwal & Ors. regarding proceedings before an Estate Officer, the Court noted that "the entire proceedings show that their whole attempt was to delay the proceedings."

On the plea of res judicata, the Court held that the earlier show cause notice of 1999 had been issued without determining the lease or passing any order of re-entry under Clause 5 of the lease deed, whereas the present proceedings had been initiated only after a fresh notice of re-entry dated 12.03.2026 was served upon the appellant, calling upon it to hand over vacant possession, which the appellant had failed to comply with, opting instead to file a civil suit that was later disposed of on the respondent's assurance not to dispossess it without due process.

On the question of extension of lease by conduct, the Court held that the sum of Rs. 3,48,82,723 deposited by the appellant in 2013 was, as per the demand letter dated 22.07.2013, the net recoverable amount towards damages and not a payment towards future rent for extension of the lease, and that no document renewing the lease had been issued after 1994.

Applying the Supreme Court's ruling in Delhi Development Authority v. Anand Raj Agencies Private Limited, the Court reiterated that mere acceptance of rent after expiry of a lease period cannot be construed as its automatic renewal in favour of the original lessee, and held that the appellant's regular payment of use and occupation charges could not, by itself, render its possession authorised.

Concluding its assessment of the merits, the Court observed that "the appellant has thus failed to make out any prima facie case for stay of the impugned order."

Accordingly, the Court dismissed the application filed by the appellant for interim stay of the order dated 11.08.2026 passed by the Estate Officer, and directed that the appeal be renotified for disposal on 26.09.2026.

Appearances:

For the Appellant: Sh. Suhail Dutt, Senior Advocate, with Sh. Azhar Alam and Sh. Sankalp Goswami, Advocates.

For the Respondents: Sh. Ashish K. Dixit, CGSC, with Sh. Umar Hashmi, Sh. Ayush Kumar, Ms. Iqra Sheikh, Sh. Gaurav and Sh. Suchit Goyal, Advocates.

Case Title: Delhi Race Club (1940) Ltd. vs. Union of India & Anr., PPA No. 19/2026