Judgment:
S. Muralidhar, J.
IA No. 8704 of 2008 in CS(OS) No. 915 of 2007 (under Order I Rule 10 CPC)
1. In this application the Plaintiff states that on 16th July 2008 (wrongly typed as 15th July 2008) when an application IA No. 1400 of 2008, under Order XII Rule 6 CPC, was listed before the Court a statement was made to the effect that the Plaintiff is not urging the ground of sub-letting. The order passed on 16th July 2008 reads as under:
IA No. 1400/2008 in CS (OS) No. 915 of 2007
Today the case was fixed for hearing on this application made by the plaintiff under Order XII Rule 6 CPC. Learned Counsel for defendant Nos. 1 to 6 states that defendant Nos. 7 to 9 remains to be served and, therefore, till they are served, this application should not be heard whereas learned Counsel for the plaintiff states that in view of the admission made by defendant Nos. 1 to 6 in their written statement, the plaintiff is ready to drop defendant Nos. 7 to 9 from the array of the plaint. Ordered as such. Amended memo of parties be filed within three days.
List for hearing of this application on 28th July, 2008.
2. Pursuant thereto, an amended memo was filed on 23rd July 2008 dropping Defendants 7 to 9. Thereafter the present application has been filed on 26th July 2009 seeking to drop Defendants 2 to 6 as well from the array of parties. There has been no reply filed to this application. The application is allowed and the Defendants 2 to 6 are dropped from the array of parties.
3. The application is disposed of.
IA No. 1400 of 2008 in CS(OS) No. 915 of 2007 (under Order XII Rule 6 CPC) and IA No. 8774 of 2008 in CS(OS) No. 1283 of 2008 (under Order XII Rule 11 CPC)
4. CS(OS) No. 915 of 2007 is a suit filed by Anil Rai Electronics Enterprises Pvt. Ltd ('AREEPL') against Anand International India ('AII') and 8 others for recovery of possession of the immovable property No. B-II/63, Mohan Co-operative Industrial Estate, New Delhi (hereinafter the suit premises) comprising a basement, ground floor, mezzanine floor and first floor. Defendants 2 to 4 are the partners of Defendant No. 1, AII. Defendants 6 to 8 are the Directors of Defendant No. 5 Company. It is stated that Defendant No. 1 firm, through its Managing Partner Defendant No. 2, has illegally sublet and assigned the tenancy rights in the suit premises to Defendants 5 to 8. Defendant No. 9, a company incorporated in Mauritius, holds the major shareholding stake of Defendant No. 5 and has fundamental control of the management and affairs of Defendant No. 5.
5. The suit premises was let out on 8th October 2002 by AREEPL to AII and Defendants 2 to 4 for a period of three years on rent of Rs. 3,40,000/- per month. The tenancy was to commence on 1st December 2002 with a lock-in period of 24 months. It is agreed that the tenancy may be renewed for a period of six years at an increased monthly rent of Rs. 3,91,000/- with effect from 1st December 2005. It is stated that thereafter the rent stood increased
6. According to the Plaintiff, the aforementioned lease deed was unregistered and as a result thereof the tenancy of Defendant Nos. 1 to 4 in the suit premises was a month-to-month tenancy terminable with 15 days' notice as envisaged in Section 106 of the Transfer of Property Act, 1882 ('TP Act').
7. It is stated that as the Plaintiff did not wish to continue the tenancy on 10th February 2007, a lawyer's notice was issued by the Plaintiff to Defendants 1 to 4 terminating the tenancy with effect from 1st March 2007 thus giving them 15 days' clear time to vacate the suit premises and handover possession. The Defendants replied to the notice on 25th February 2007 through their counsel denying that they had sub-let the premises as alleged by the Plaintiff. It was further denied that the rent had been enhanced to Rs. 4,56,000. It was asserted that the rent had been enhanced to Rs. 3,91,000/- per month with effect from 1st December 2005 and remained as such. The termination of the lease was challenged as being illegal and in violation of the lease deed dated 8th October 2002.
8. The Plaintiff states that it did not accept any rent from the Defendants after February 2007. It is submitted that since the Defendant had no defence to offer, and the lease stood determined by the service of 15 days' advance notice upon the Defendants in terms of Section 106 TP Act, the continued occupation of the suit premises by the Defendants beyond the termination of the lease was illegal and unauthorised. The Plaintiff therefore prayed for a decree of possession. The Plaintiff also claimed mesne profits and damages with effect from 1st March 2007 @ Rs. 11,50,000/- per month which was the prevalent market rent for the suit premises. Apart from the above reliefs, the Plaintiff also sought a decree of permanent injunction.
9. A written statement was filed by Defendants 1 to 6 on 5th December 2007. Pursuant to orders dated 13th January 2009 passed in IA No. 8705 of 2008 filed by the Defendants 1 to 6 under Order VI Rule 17, the said written statement was permitted to be amended. The amended written statement was filed on 28th February 2009.
10. While in para 4 of the unamended written statement it was contended that 'there was a consensus ad idem between the parties to present suit that the Plaintiff will not disturb the tenancy of the Defendant till the expiry of the tenancy period' and further that 'if this was not the intention between the parties then what made the Plaintiff to execute a document granting 9 years lease right to Defendant No. 1', in the amended written statement fresh paras 5, 6, and 7 have been added in which it is contended that the Plaintiff has taken benefit of the enhanced rent for the renewed lease period and that having taken such benefit 'the Plaintiff cannot resile from the agreement which he was supposed to have performed.' It is then contended that 'pursuant to the enhanced rent, the Defendant/Applicant is in the permissive physical and legal possession of the property and the Plaintiff has been treating the Defendant No. 1 as his tenant.' It is contended in para 6 of the amended written statement that the Defendant has performed their part of the contract and were ready and still willing to perform the remaining part. It is claimed in para 7 that 'acceptance of the enhanced rent creates a moral/legal obligation of the Plaintiff not to disturb the possession of the Defendant till the expiry of the renewed period.' It is further stated that 'payment of the enhanced rent entitles the Applicant/Defendant to retain the physical possession of the property as permissive possession may be not as lease but surely as a Licensee till the expiry of the renewed period.'
11. In the parawise reply to the plaint, it is stated in the amended written statement that 'para No. 4 is not denied to the extent that the lease deed dated 08.10.2002 was unregistered document.' It was further sought to be clarified that at the time of execution of the said agreement, the Plaintiff had 'assured the Defendant that he will get the lease deed registered.' It is claimed that 'whenever Plaintiff requested the Defendant to get the lease deed registered, the Defendant on one pretext or the other denied the registration of the lease deed.' It is claimed that 'since the relations of the parties were cordial at that time Defendants did not initiate any legal proceedings against the Plaintiff.' It is claimed in para 6 of the reply on merits that 'in the guise of non-registration of the lease deed, the Plaintiff is forcing the Defendant to vacate the premises without any cause of action.'
12. It is significant that in para 3 of the plaint the plaintiff averred that the rent for the suit premises stood increased to Rs. 3,91,000 per month with effect from December 2005 and thereafter to Rs. 4,56,000 which was the present rent. Both in the earlier as well as the amended written statement in reply to para 3 of the plaint the defendant AII has stated that 'para 3 is not denied being the content of the lease deed dated 08.10.2002.'
13. After the unamended written statement was filed on 5th December 2007, the Plaintiff AREEPL has filed the present application being IA No. 1400 of 2008 under Order XII Rule 6 CPC on 29th January 2008. It was submitted that since Defendant No. 1 has not denied the letting out of the suit premises to it by the agreement dated 8th October 2002, or that the said lease deed was unregistered or of the receipt of the notice dated 10th February 2007 or of the rent being Rs. 4,56,000/- per month, a decree for possession on admissions should be passed.
14. In reply to this application, it is contended on behalf of the Defendants that there is no unequivocal and unambiguous admission and therefore the application is not maintainable as such.
15. At this stage, a reference must be made to the subsequent developments. On 9th July 2008, over five months after the filing of the aforementioned application under Order XII Rule 6 CPC by AREEPL in CS (OS) No. 915 of 2007, the Defendant No. 1 AII along with Lilliput Kids Pvt. Ltd. ('LKPL') and Sanjeev Narula filed CS(OS) No. 1283 of 2008 for a decree of specific performance directing AREEPL to renew the lease deed for six years as per Clause 2 of the agreement dated 8th October 2002. In the said suit it was claimed that AII used to be a close family unit and that Plaintiff No. 3 Sanjiv Narula was holding 75% stakes in the firm. It is claimed that by a sale agreement dated 9th October 2006 LKPL acquired the business of AII and, therefore, pursuant to that agreement AII transferred and assigned the business/undertaking on sale basis in favour of LKPL. Shri Sanjeev Narula was stated to be holding 77.5% shares of LKPL. It is claimed in para 6 of the plaint in CS(OS) No. 1283 of 2008 that by the lease dated 8th October 2002 AII took on lease the suit premises from AREEPL 'for a total period of 9 years for the purposes of setting up of the manufacturing unit.' It is claimed that although LKPL is not a party to the lease deed, 'LKPL is there at the lease premises' and that in order to show that LKPL is not a sub-tenant, it is a proper and necessary party to the present suit.' It is reiterated that total lease period was for 9 years with clear understanding that after the expiry of 3 years, the present agreement will be renewed for a 'further period of 6 years.' It is mentioned that after the expiry of the first phase of three years the rent stood increased with effect from 1st December 2005, and that AREEPL has accepted the enhanced rent and was treating AII as its tenant. It is contended that it was understood by both the parties that the lease stood extended for the next 3 years and that it only required the execution of a fresh agreement, the responsibility for which was of AREEPL. A mention was made of Suit No. 915 of 2007. It was stated that the cause of action for filing the suit CS (OS) No. 1283 of 2008 arose when the AREEPL issued the termination notice dated 10th February 2007 to AII.
16. AREEPL filed IA No. 8774 of 2008 under Order VII Rule 11 CPC in CS (OS) No. 1283 of 2008 contending that since the lease deed was not sufficiently stamped and since AII and the two others were seeking specific performance on the basis of the unregistered lease deed, the said document was liable to be impounded and AII should be asked to pay deficient stamp duty. It was further stated that the plaint in CS (OS) No. 1283 of 2008 did not disclose any cause of action.
17. In both applications, i.e. IA No. 1400 of 2008 in CS (OS) No. 915 of 2007 under Order XII Rule 6 CPC and IA No. 8774 of 2008 in CS(OS) No. 1283 of 2008 under Order VII Rule 11 CPC, the question that arises is whether there is any subsisting tenancy in favour of AII as claimed by it. Mr. Sanjeev Sachdeva, learned Counsel for AREEPL submits that the admissions by AII are clear and unequivocal. He relies upon the judgment in Surjit Sachdev v. Kazakhstan Investment Services Pvt. Ltd. : 66 (1997) DLT 54 (DB) to contend that the admissions can be either express or constructive. Relying on the judgment of the Supreme Court in Ram Rattan v. Bajrang Lal : (1978) 3 SCC 236, he submits that an insufficiently stamped document cannot be admissible in evidence and cannot form the basis for grant of the relief of specific performance. Relying on the judgments in Asea Brown Boveri Limited v. Chiranjiv Lal Sharma : 75 (1998) DLT 773 and Singer India Ltd. v. Amit Gupta : 88 (2000) DLT 186 (DB) it is submitted that an unregistered lease deed cannot give a right to the lessee to continue to remain in the premises beyond the period of lease. He also places reliance upon the judgment in Uptron Power Electronics Ltd. v. G.L. Rawal : 80 (1999) DLT 706 (DB) in this regard. Referring to the judgment in Sarup Singh Gupta v. S. Jagdish Singh : (2006) 4 SCC 205 he submits that the mere acceptance of enhanced rent does not amount to waiver of the notice to quit. Since it was a month-to-month tenancy and the requirements of Section 106 TP Act stood satisfied, AII had to vacate the premises.
18. Appearing for All, Mr. Sanjay Jain, learned Senior counsel submits that where the landlord opts to sue on the basis of more than one plea, then it cannot be permitted to withdraw one of the pleas particularly when the decision on such plea would require the evidence to be led. He submits that the plea that AII had sub-let the suit premises formed the very basis for the eviction notice and the subsequent filing of the suit by AREEPL. Therefore AREEPL cannot now be permitted to give up that plea and seek a decree on admission vis-a-vis the other plea. According to him, the plaint has to be read as a whole. It is then submitted that eviction of a tenant cannot be sought only on the ground that the lease deed was not registered particularly since that situation was brought about by AREEPL itself. He refers to the decisions in Maneklal Mansukhbhai v. Hormusji Jamshedji Ginwalla & Sons : AIR (37) 1950 SC 1, Kedar Nath Dave (Deceased) Through Smt. Vidya Dave v. Delhi Cloth & General Mills Co. : ILR 1971 (2) Delhi 374. Referring to the judgment in S. Rajdev Singh v. Punchip Associates Pvt. Ltd 145 (2007) DLT 226 it is submitted that the suit filed by the AII was within limitation. It is then submitted that unless the admissions are unambiguous and clear, no decree can be sought on admissions in terms of Order XII Rule 6 CPC. Reliance is placed on the judgments in Puran Chand Packaging Industrial P. Ltd. v. Sona Devi : 154 (2008) DLT 111 (DB), Bhanu Mehra v. Dato Brij Kishore : 2001 (60) DRJ 1 (DB) and Deepak Chopra v. Raj Kumar Adhupia : 103 (2003) DLT 499.
19. The submissions of learned Counsel have been considered. The fact that a lease deed was executed on 8th October 2002 is not in dispute. The fact that it remained to be unregistered is also not in dispute. AII does not deny that it is a tenant of AREEPL. There also does not appear to be any dispute about the amount of rent as well as the issuance of the notice dated 8th December 2007 on behalf of AREEPL requiring AII to vacate the premises.
The question really is about the status of the document dated 8th October 2002.
20. A perusal of the lease deed in the instant case shows that the suit premises was a constructed one with a building thereon. The agreement between the parties was that it would be 'initially for a period of three (3) years, w.e.f. 1st December 2002, and the same shall be renewed for another period of six (6) years, subject to the conditions that after three years w.e.f. 1st December 2005 there shall be 15% (fifteen per cent) increase of rent, and balance three (3) years, there shall 20% (twenty per cent) increase (or as agreed mutually) of monthly rent i.e. w.e.f. 1st December 2008 to 30th November 2011.' Para 15 of the agreement stated that the lessee shall not sub-let the premises to any party without the written permission of the lessor and that if the lessee failed to pay the monthly rent as agreed, the lessor would have the right to get the leased premises vacated from the lessee.
21. The question whether a lessee can claim a right of renewal particularly when it the lease deed is not a registered document was examined by this Court in Singer India. It was held therein that such a document of tenancy beyond one month can be sought to be enforced only if is registered in terms of Section 107 TP Act. It was held that even if Section 53-A TP Act permitted the tenant to retain possession on the doctrine of part-performance, Section 53-A had to be read subject to Section 107 TP Act and should be held not to permit retention of possession by a lessee beyond the period of one month where the lease deed is not registered. It did not automatically follow that the Appellant, by paying the enhanced rent, acquired the right to stay in the leased premises for another period of three years. It was held that the period of renewal would be available only if the agreement was reduced to writing and the written instrument which is duly stamped and registered. In the absence of registration the lease became a month-to-month tenancy and the lessor had a right to terminate such a tenancy in accordance with the provisions of Section 106 of the TP Act.
22. In Delhi Motor Co. v. U.A. Basrurkar (dead) by his Legal Representatives AIR 1968 SC 794 it was emphasized that Section 53-A is only available as a defence and cannot be invoked for enforcing the rights on the lessee sought to be derived from an unregistered agreement. The entire suit of the AII i.e. CS (OS) No. 1283 of 2008 (filed on 9th July 2008) is for specific performance of an unregistered lease deed. It was observed (AIR, P.798):
6. In these circumstances, an argument was put forward on behalf of the firm that, though this contract to lease had not been registered, the firm could claim possession under it in view of the provisions of Section 53A of the Transfer of Property Act, because, in this case, the Company would be debarred from enforcing against the firm any right in respect of that property of which the firm had already taken possession, viz., part of the Show Room and a portion of the Balcony. In our opinion, this argument proceeds on an incorrect interpretation of Section 53A, because that section is only meant to bring about a bar against enforcement of rights by a lessor in respect of property of which the lessee had already taken possession, but does not give any right to the lessee to claim possession or to claim any other rights on the basis of an unregistered lease. Section 53A of the Transfer of Property Act is only available as a defence to a lessee and not as conferring a right on the basis of which the lessee can claim rights against the lessor. This interpretation of Section 53A was clearly laid down by their Lordships of the Privy Council in Probodh Kumar Das and Ors. v. Dantmara Tea Co. Limited and Ors. 0043/1939 : 66 I.A. 293 : AIR 1940 PC 1.
23. The above position in law has been reiterated in other judgments of this Court as well as of the Supreme Court. In Ram Rattan, it is emphasized that an insufficiently stamped document cannot be tendered in evidence. In Uptron Electronics, it was held in similar circumstances that in the absence of a registered instrument, tenancy was only month-to-month and that the lessor could terminate the tenancy by a notice under Section 106 TP Act.
24. In Maneklal Mansukhbhai it was held that where in an action to eject a lessee the Defendant takes the plea of part performance and proves that he had taken a possession in terms of the agreement and had built a factory on the land and also that he was paying rent to the Plaintiff in terms of the agreement, the Defendant was entitled to retain possession despite the absence of a registered lease deed. What is important to notice in the said case is that after taking possession of the land, which was a vacant plot, the lessee 'put up thereupon a ginning and a pressing factory, a bungalow, engine rooms and other structures.' In para 18 of the judgment, the Court noted that the factory could not have been built before the sanction of the government was received. It further noted that not only did the lessee take possession in part performance of the agreement but he also offered the rent agreed upon and paid it not only to the Talukdari Settlement Officer but to all those who subsequently managed the interest of the talukdars in the survey numbers in dispute. The original lessee effected a mortgage of the property in favour of the Defendant after entering into possession thereof. The equity of redemption was sold at an auction sale. The court observed that the Defendant and his predecessor in interest had performed their part of the contract and it was only the execution of the lease deed in favour of the lessee and its registration that remained to be done. It was in pursuance of this lease agreement that all the subsequent acts were done. The facts of the said case are entirely different when compared with the facts of the instant case.
25. The law as explained in the subsequent decisions of the Supreme Court in Delhi Motor Company and Ram Rattan and of this Court in Uptron Powertronics and Singer India are apposite and in terms thereof it is held that AII cannot be granted the relief of specific performance in its suit. To this extent the application made by the AREEPL under Order VII Rule 11 seeking dismissal of the said suit for want of cause of action has to be allowed. The resultant position would be this that on the basis of such unregistered lease deed since no relief can be granted to AII, it cannot seek to continue to be in possession of the suit premises in terms of the said lease deed. The suit by AII should fail for not disclosing a cause of action.
26. Turning to AREEPL's application under Order XII Rule 6 CPC, it seen that the AII has not denied the tenancy or the current rent. It also does not deny receipt of the notice to quit issued by AREEPL to it. It appears to this Court that the requirement of law as explained in the following passage in Surjit Sachdev stands satisfied:
17. The question now is that whether there is any admission or not so as to entitle the plaintiff to have a decree for possession. The factors which deserve to be taken into consideration in order to enable the Court to pass a decree in plaintiff's favor as regards possession in such like suits are: (a) existence of relationship of Lesser and lessee or entry in possession of the suit property by defendant as a tenant; and (b) determination of such relation in any of the contingency, as envisaged in Section 111 of the Transfer of Property Act. One of the modes stated therein is by efflux of time limited by the lease. Only on unequivocal admission of the above two factors will entitle the plaintiff to a decree on admission. Admission need not be made expressly in the pleadings. Even on constructive admissions Court can proceed to pass a decree in plaintiff's favour.
27. It was sought to be contended by learned Senior counsel for AII that by accepting the enhanced rent, the lessor had impliedly agreed to the renewal of the lease for a further period of three years after 1st December 2008. In Sarup Singh Gupta, it was held by the Supreme Court that 'mere acceptance of rent' cannot be said to amount to waiver of notice to quit 'unless there is any other evidence to prove or establish that the landlord so intended.' Here it is plain from the correspondence between the parties that the landlord had throughout been maintaining that there was renewal of the lease deed. In the absence of any registered leased deed giving the right to the Plaintiff to continue in the premises for the extended period, the continued occupation of the suit premises by the tenant cannot be held to be permissible in law. There is no merit in the contention of learned Senior counsel for AII that the plea of sub-letting must be considered, and evidence awaited for that purpose, notwithstanding AREEPL having given up that plea. If AREEPL chooses not to press that ground, the Court cannot compel it to lead evidence to prove it. The prayer for a decree on admissions has to be considered on the basis of the pleadings de hors such plea.
28. For all of the above reasons, this Court allows I.A. No. 1400 of 2008 in CS (OS) No. 915 of 2007 filed by AREEPL under Order XII Rule 6 CPC and CS (OS) No. 915 of 2007 will stand partially decreed in terms of prayer (a). In other words, a decree is issued in favour of AREEPL and against AII for possession of the suit premises i.e. B-II/63, Mohan Co-operative Industrial Estate, New Delhi comprising a basement, ground floor, mezzanine floor and first floor. Decree be drawn up accordingly.
29. For the remaining prayers in the suit, CS (OS) No. 915 of 2007 is set down for trial. List CS (OS) No. 915 of 2007 before the learned Joint Registrar for admission/denial of documents on 26th November 2009. It is made clear that the parties should complete the admission/denial of documents on the date fixed by the learned Joint Registrar for that purpose. If for some reason they are unable to do so, then each party will file an affidavit within two weeks thereafter indicating in a separate column alongside the index of documents filed by the other party, which of the documents is admitted or denied. List CS (OS) No. 915 of 2007 before Court for framing of issues on 17th December 2009.
30. IA No. 8774 of 2008 filed by AREEPL under Order VII Rule 11 CPC in CS (OS) No. 1283 of 2008 is allowed. The plaint in CS (OS) No. 1283 of 2008 is rejected and CS (OS) No. 1283 of 2008 is accordingly dismissed.