The Delhi High Court has stayed the operation of the June 9, 2026 judgment that had upheld the Union of India’s re-entry into the Sujan Singh Park property and dismissed the suit filed by Sir Sobha Singh and Sons Pvt. Ltd., paving the way for eviction proceedings concerning the property housing the Ambassador Hotel.
Justice Neena Bansal Krishna held that substantial questions of law arise regarding the validity of the Government’s 1960 re-entry and whether a civil suit challenging the termination of a Government Grant is barred under the Government Grants Act, 1895. The Court observed that while the rights and obligations under a Government Grant are governed by its terms, Section 3 of the Act does not, prima facie, exclude the jurisdiction of a Civil Court to interpret the Grant, determine whether its terms were breached, or examine whether the Government acted in accordance with the Grant.
The dispute dates back to 1960, when the Union of India informed Sir Sobha Singh and Sons that it had re-entered the property with effect from July 29, 1960, alleging failure to rectify breaches of the Agreement for Lease dated October 8, 1945. The company had instituted a suit seeking declaration that the re-entry was illegal, permanent injunction against dispossession and specific performance of the Agreement for Lease.
The Trial Court had decreed the suit in 2009, finding that the construction, including the Hotel Block, had been undertaken with the knowledge and approval of Government authorities and that the alleged misuse had not been established. The First Appellate Court subsequently reversed the decree and dismissed the suit, holding that the reliefs of specific performance, declaration and injunction did not constitute a competent suit in view of the Government Grants Act.
The High Court noted that contemporaneous correspondence from 1943 onwards indicated that the construction of the Hotel Block was undertaken with the knowledge and approval of competent Government officers. It also took note of the 1951 ex post facto sanction granted for the Hotel and observed that the First Appellate Court had not adequately considered this material correspondence while reversing the Trial Court’s findings.
On the question of possession, the Court held that although the Government can initiate proceedings under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 after valid termination of a Government Grant, such proceedings presuppose a valid and lawful determination of the Grant. The legality of the Government’s re-entry therefore remained open for examination in the appeal.
The Court further noted that the appellant had remained in continuous possession of the property for decades and that its possession had been protected by an injunction since 1960. Considering the substantial questions of law and the potential impact on other occupants of the property, including those residing in the complex, the Court found it necessary to preserve the existing position pending adjudication of the appeal.
Accordingly, the High Court stayed the June 9, 2026 judgment and decree and directed the parties to maintain status quo with respect to the suit property during the pendency of the Regular Second Appeal. The Court clarified that the Union of India would remain at liberty to pursue remedies under any other law independently of the stayed judgment.