*IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision:
24. h May, 2013 % + CS(OS) 2697/2011. M/S KEVENTER AGRO LIMITED ..... Plaintiff Through: Ms.Pinky Anand, Sr. Adv. with Mr. Attin Shankar Rastogi, Mr. Aayush Chandra & Ms. Natasha Shehrawat, Advs. versus M/S KALYAN VYAPAR PVT LTD & ANR ..... Defendants Through: Mr. Ravinder Sethi, Sr. Adv. with Mr. Dipak Kumar Jena & Mr. Y. Nautial, Advs. for D-1. Mr. Rajat Aneja, Mr. C.M. Kapoor & Mr. Ishaan Chhaya, Advs. for D-2. CORAM :HONBLE MR. JUSTICE RAJIV SAHAI ENDLAW RAJIV SAHAI ENDLAW, J IA.No.17339/2011 & IA.No.20198/2011 (both of the plaintiff u/O 3.Rule 1 & 2 CPC) & IA No.6590/2013 (of the defendant no.2 for interim directions).
1. The plaintiff had instituted the present suit, originally against the defendant no.1 only, pleading (i) that the plaintiff and the defendant Company had certain business transactions and pursuant to that, around September / October, 2007 the defendant permitted the plaintiff permissive use and occupation of the first floor of property No.9, Masjid Moth, Commercial Complex, Greater Kailash-II, New Delhi, to enable the plaintiff to set-up its office therein and handed over peaceful and vacant possession to the plaintiff; (ii) the defendant further agreed that the plaintiff shall have first option to purchase the entire said property; (iii) that on the assurances and representations of the defendant, the plaintiff after entering into possession made substantial improvements in the suit premises and spent several lacs of rupees; the plaintiff changed the entire flooring and installed tiles on the flooring; (iv) the plaintiff started running its export division office from the said first floor with the express consent and permission of the defendant Company that the plaintiff shall have permissive use and possession and first option to purchase the entire property; (v) around June, 2010 the defendant created hindrance and obstructed the employees of the plaintiff from accessing the terrace where the water tanks were situated; the plaintiff filed a Police complaint against the defendant on 4 th June, 2010 and with the intervention of the Police the plaintiff was permitted access to the terrace; that on 3 rd August, 2010 the defendant confirmed that the said first floor is under the possession of Shri Motilal Bothra and Shri M.K. Jalan, Chairman of the plaintiff Company and agreed that the plaintiff shall have the first option to buy the said property and 30% of sale proceeds of the said building shall be given to Mr. M.K. Jalan; and, (vi) on 24 th October, 2011 when the employees of the plaintiff came in the morning they found that the security guards of the defendant had locked the main door thereby creating a hindrance in the egress and ingress of the plaintiff; again on 25 th October, 2011 the employees of the plaintiff found the main door locked and the plaintiff could not get access to the staircase leading to the first floor; that the Police failed to take any action. The plaintiff accordingly on or about 1 st November, 2011 instituted the present suit (a) for permanent injunction restraining the defendant from blocking the egress and ingress of the plaintiff and its employees to the first floor of the property or creating any hindrance or hurdle in use thereof; and, (b) for mandatory injunction directing the defendant to comply with their obligations.
2. Summons of the suit were issued on 4 th November, 2011. Though the plaint was accompanied by IA.No.17739/2011 for interim relief restraining the defendant from obstructing the access of the plaintiff and its employees to the first floor of the premises but no ex parte ad interim relief was granted in favour of the plaintiff. On the next date i.e. 17 th November, 2011 the counsel for the then sole defendant informed of the property having been sold to the defendant no.2 M/s. Compass Tracom Pvt. Ltd. vide Sale Deed dated 4th August, 2011; accordingly the said M/s. Compass Tracom Pvt. Ltd. was impleaded as defendant no.2 and vide order of the same date a Court Commissioner was appointed to report as to who is in possession of the first floor and to also prepare an inventory of articles lying on the first floor and to take photographs. Vide ad interim order of the same date the parties were also restrained from creating third party interest in respect of the first floor till further order. Vide subsequent order dated 13th December, 2011 the parties were directed to maintain status quo with respect to the possession of the property.
3. The plaintiff thereafter applied for amendment to, in addition to the relief already claimed, claim reliefs of, specific performance of the Agreement by the defendant no.1 of sale of the entire property to the plaintiff and of cancellation of the Sale Deed executed by the defendant no.1 in favour of the defendant no.2 and for other ancillary reliefs and to incorporate in the plaint pleas in support of the said additional reliefs. Vide order dated 16th May, 2013, without prejudice to the pleas of the defendant no.2, the said amendment was allowed.
4. The Court Commissioner has filed a report to the effect, that the first floor had no door; construction material (broken) such as used but dismantle wooden boards and bricks, some certificates/documents of the plaintiff, AC Unit, wall cabinets , wall cupboard, pile of broken/used bricks and other miscellaneous office items were found lying on the first floor with both parties claiming the ownership thereof; it has been reported that the entire first floor is in a broken state and the key of the main door of the building was in possession of the defendant no.2 and the entry to the first floor can only be through the said main door.
5. The plaintiff has filed IA No.20198/2011 for interim relief (i) restraining the defendant no.2 from interfering with the access of the plaintiff and its employees to the first floor of the property and from disturbing with the peaceful use and occupation of the plaintiff of the first floor, (ii) for a direction to the defendant no.2 to restore the first floor to its original position and to return the valuable equipments, papers and belongings to the plaintiff; (iii) and, to restrain the defendants from creating any third party rights in respect of the entire property.
6. The defendant no.2 has filed IA No.6590/2013 supra seeking permission for letting out of the suit property.
7. It is the plea of the defendant no.2 that the vacant physical possession of the entire property including the first floor was handed over by the defendant no.1 to the defendant no.2 on 4th August, 2011 and the defendant no.2 since then is in uninterrupted possession of the entire property; that the defendant no.1 has colluded with the plaintiff to fabricate the Agreement dated 3rd August, 2010 between Shri M.K. Jalan and Shri Vinay Maloo; that the plaintiff while filing the suit had not claimed any relief on the basis of the said Agreement; that the defendant no.2 has paid sale consideration of Rs.10 crores to the defendant no.1 for the said property and ought to be permitted to reap returns thereof; that the document dated 3 rd August, 2010 is not even an Agreement to Sell which can be specifically enforced; that the plaintiff was not in possession of the property at the time of filing the suit against the defendant no.1 and was in fact aware of the sale in favour of the defendant no.2 as is evident from the Resolution dated 19 th October, 2011 of the Board of Directors of the plaintiff authorizing institution of the suit not only against the defendant no.1 but against other person or Company also; that inspite of that ex parte order was sought to be obtained against the defendant no.1 only; that though in the plaint as originally filed the cause of action was stated to have accrued on 24 th October, 2011 but the Resolution of the Board of Directors authorizing the institution of the suit was of 19 th October, 2011; that though the plaintiff was earlier mentioning the address of the suit premises on its letterhead but the letterhead containing the extract of the Resolution dated 19th October, 2011 does not mention the address of the suit premises and all which is indicative of the plaintiff having vacated the suit property prior to the execution of the Sale Deed by the defendant no.1 in favour of the defendant no.2 on 4th August, 2011.
8. The senior counsel for the plaintiff and the counsel for the defendant no.2 have been heard on all the three applications aforesaid. The senior counsel for the defendant no.1 has chosen not to address any arguments.
9. It is not in dispute that as of today the control of the entire property is with the defendant no.2 and the plaintiff is not even able to enter the property. It was as such enquired from the senior counsel for the plaintiff as to why the property should not be permitted to be put to use during the pendency of this suit by allowing letting thereof for a period of not more than three years and after approval of the Lease Deed by this Court and with a provision being made for the rent so earned by the property, all subject to the final outcome of the suit.
10. The senior counsel for the plaintiff contended that the plaintiff was in settled possession of the property and has been illegally deprived of the use thereof and has sought the interim relief of restraining defendants from obstructing the use by the plaintiff of the first floor of the property. It is contended that if the property is ordered to be let, it would mean that the plaintiff would not be entitled to use of the first floor of the property which was in its settled possession. The senior counsel for the plaintiff thus pressed for the interim relief allowing the plaintiff to use of the first floor and contended that the other floors can be permitted to be let out with the rent thereof being deposited in this Court to be released in favour of the plaintiff if succeeds in its claim for specific performance of the Agreement of Sale of the entire property.
11. It was at the outset enquired from the senior counsel for the plaintiff as to how the plaintiff can be entitled to the rent of the floors other than the first floor, even if ultimately succeeding in the suit for specific performance of the Agreement of Sale in as much as the right of the plaintiff to the property and to the rent therefrom would accrue only upon the title to the property pursuant to a decree for specific performance being conveyed to the plaintiff and not prior thereto. Attention of the senior counsel for the plaintiff in this regard was invited to the judgment of this Court in Jiwan Das Vs. Narain Das AIR 198.Delhi 291 and Sunil Kapoor Vs. Himmat Singh 167 (2010) DLT 80.holding so.
12. The senior counsel for the plaintiff agreed that the plaintiff would have no claim to rent of the floors other than the first floor and the same need not be deposited in this Court and the same right fully belongs to the defendant no.2 who today is the owner thereof.
13. As far as the right claimed by the plaintiff at this interim stage to the use of the first floor is concerned, it is the case of the plaintiff that the defendant no.1 had permitted the plaintiff permissive use and occupation of the first floor to set up its office therein and the plaintiff was given the right of license with respect to the said first floor.
14. It was as such been enquired from the senior counsel for the plaintiff, that the rights claimed by the plaintiff to the first floor being merely as a licensee, how the plaintiff can seek a relief in the nature of re-possession. Attention of the counsels in this regard was invited to Section 64 of The Indian Easements Act, 1882 which is as under:64. Licensees rights on eviction. - Where a license has been granted for a consideration, and the licensee, without any fault of his own, is evicted by the grantor before he has fully enjoyed, under the license, the right for which he contracted, he is entitled to recovery compensation from the grantor. It was enquired whether not the aforesaid is indicative of a licensee once evicted from the licensed premises having the right only of recovery of compensation and having no right of re-possession or restoration of use.
15. On request of the counsels time was granted to enable the counsels to consider the aforesaid provision.
16. The senior counsel for the plaintiff after studying the matter contended that:(i). that the relief provided of compensation is only against the grantor of the license and grantor in the present case was the defendant no.1 and thus the limitation even if any in Section 64 would not be available against the defendant no.2 who is the purchaser of the property from the defendant no.1; (ii). that Section 64 cannot be read as limiting the right only to that of compensation. Attention in this regard is invited to M.S. Baliga Vs. Mangalore City Corporation AIR 199.Karnataka 76 holding that Section 64 of the Easements Act does not take away the remedy of restoration of possession available to a forcibly dispossessed licensee under Section 6 of the Specific Relief Act and such a dispossessed licensee has both remedies available to him i.e. to recover compensation under Section 64 of the Easements Act and to seek restoration of possession under Section 6 of the Specific Relief Act and one remedy does not bar the other; (iii). reference was also made to Society of the Holistic Child Development India Vs. Church of North India Synod 167 (2010) DLT 21.where an order of re-possession of a licensee forcibly evicted was made, though Section 64of the Easements Act was not noticed; 17. Attention of the senior counsel for the plaintiff was however invited to Corporation of Calicut Vs. K. Sreenivasan AIR 200.SC 205.laying down that under Section 64 supra even if a licensee is evicted, though grounds for revocation of license do not exist or forcefully evicted, his only remedy is to recover compensation from grantor and not to recover occupation. The counsel for the defendant no.2 in this regard also invited attention to a judgment dated 17 th May, 2010 of the Division Bench of the Kerala High Court in FAO No.63/2010 titled Trivandrum Golf Club Vs. State of Kerala to the same effect.
18. The senior counsel for the plaintiff however contended that it is not the case of the plaintiff that it has been dispossessed from the licensed premises, rather it is the case of the plaintiff that the plaintiff is still in possession, use and occupation of the premises and is only being obstructed from its right of accessing the premises. It was contended that the judgment of the Supreme court in K. Sreenivasan cannot be read as permitting the licensors to forcefully remove the licensees from the premises and that if it were to be so held, would lead to anarchy. It was further contended that the law of this county is that settled possession cannot be disturbed forcibly. Reliance in this regard is placed on para 97(4) of Maria Margarida Sequeira Fernandes Vs. Erasmo Jack De Sequeira (2012) 5 SCC 37.and Sopan Sukhdeo Sable Vs. Assistant Charity Commissioner AIR 200.SC 180.and Rame Gowda Vs. M. Varadapra Naidu (2004) 1 SCC 769.It was argued that the defendant no.2 in the present case has totally vandalised the premises by removing the door to the first floor which was under lock and key of the plaintiff, by forcibly removing the furniture, fixtures and goods of the plaintiff lying therein and by ripping apart the entire flooring. The same was demonstrated from the photographs taken at the time of Local Commission. It was contended that the defendant no.2 who has indulged in such vandalism, in equity cannot be allowed to reap the benefits of the illegalities committed by it and the ends of justice require the plaintiff to be put back into possession of the first floor and/or being permitted the use thereof. It was yet further contended that the plaintiff had also carried out the works of permanent nature in the said first floor and the license in its favour was thus irrevocable under Section 60(b) of the Easements Act. Reliance in this regard was placed on Mohammad Abdul Jamil Vs. Manzoor Ahmad AIR 193.Allahabad 572. It was further urged that the plaintiff also has a prima facie case on the basis of the Agreement to Sell by the defendant no.1 in its favour and for which reason also it is in the interest of justice that the plaintiff be restored the use of the first floor. From the written statement/replies of the defendant no.1 it is contended that the defendant no.1 has admitted to the plaintiff being in use of the first floor till sale to the defendant no.2 and thus the impugned actions of obstructing the access of the plaintiff to the first floor and of vandalism are attributable to the defendant no.2 only and the version of the defendant no.2 of the plaintiff having left the premises cannot be believed.
19. Per contra, the counsel for the defendant no.2 contended that the Agreement of which specific performance is claimed by the plaintiff is not an Agreement at all and the claim for specific performance cannot be maintained thereon. It was further argued that the Agreement to Sell in favour of the defendant no.2 in pursuance to which the Sale Deed in favour of the defendant no.2 has been executed is of a date prior to the Agreement in favour of the plaintiff. It was yet further contended that the Sale Deed in favour of the defendant no.2 records the defendant no.1 having given the actual physical possession of the entire property to the defendant no.2. Else the pleas aforesaid are reiterated 20. The Supreme Court in K. Sreenivasan supra though unequivocally laying down that Section 64 limits the remedy of an evicted licensee to that of claiming compensation only and not to resume occupation, has clarified that the same should never be understood as permitting use of force. Once the Supreme Court has laid down so, the plaintiff cannot be heard to contend to the contrary. Rather it is quite evident that the Supreme Court while interpreting Section 64 of the Easements Act so was fully aware of the possible consequences thereof.
21. As far as the plea of the plaintiff of its license being irrevocable for the reason of having carried out works of permanent nature in the premises is concerned, all that has been pleaded in paras 5 & 22 of the amended plaint is that the plaintiff has made substantial investments in the property on the assurances given by the defendant no.1 and having changed the entire flooring and installing tiles on the flooring. I am afraid the same, on a prima facie view of the matter, cannot qualify as works of permanent character within the meaning of Section 60(b) of the Easements Act.
22. The plea of the plaintiff of Section 64 being applicable only to the grantor has to be noticed to be rejected. It is not disputed that the defendant no.1 who was the grantor of the license has transferred the property to the defendant no.2. The defendant no.2 has thus stepped into the shoes of the grantor and once the property has been transferred it cannot be said that the rights of the licensee are against the erstwhile owner of the property only.
23. I am also unable to hold that the plaintiff has not been dispossessed. In the context of a license, dispossession/eviction has to be necessarily deprivation of use of the licensed premises in as much as the licensee in any case has no right to the property and possession is but a facet of one such right to the property and the only right of a licensee is to use of the premises. More than one and a half years have elapsed since the plaintiff has been so deprived of the premises. The state of the first floor as apparent from the photographs is such that the plaintiff even if permitted access to the property cannot start using the same. Considerable investment will again have to be made on the first floor of the property to make the same habitable. At this interim stage it is not very clear as to till when the plaintiff was in use of the property; though the senior counsel for the plaintiff has invited attention to telephone bills and electricity bills showing use of the property till immediately before 24 th October, 2011 but the same are also not found to be of much relevance as anyone can use the telephone connection and electricity.
24. An order at this stage, restraining the defendant no.2 from obstructing the plaintiff and its employees accessing the first floor, will tantamount to grant of mandatory interim relief permitting the plaintiff use of the property and of which it admittedly was not in use on the date of institution of the suit. No case for grant of interim mandatory relief is made out. It is also worth mentioning that hearing on these applications was held owing to the urgency shown by the counsel for the defendant no.2 for letting out of the property and the plaintiff, after having obtained ad interim order against the defendants, was not in a hurry to press the relief of being allowed access to the property and had rather behind the back of the counsel for the defendant no.2 on 22nd March, 2013 got the matter adjourned to 13th August, 2013. The relief of being allowed use of first floor was agitated only as a response to the permission sought by the defendant no.2 for letting out of the property.
25. Mention at this stage can also be made to the judgment of the Full Bench of this Court in Chandulal Vs. MCD AIR 197.Del 174 holding that use of reasonable force against a licensee is permissible.
26. I am even otherwise of the opinion that unless such a distinction is maintained, the difference between a lease or license would disappear and would amount to taking away a right of the owners of the property of granting license for use of their properties.
27. As far as prima facie claim of the plaintiff for specific performance is concerned, though the plaintiff in the plaint has also stated that it has first option to purchase but has not sought relief of pre-emption but only the relief of specific performance of the Agreement dated 3 rd August, 2010. The said Agreement is in fact not even between the plaintiff and the defendant no.1 but is between Mr. Vinay Maloo and Mr. M.K. Jalan and is as under:The following has been agreed between Mr. M.K. Jalan and Mr. Vinay Maloo: The Building No.9 at Masjid Moth Commercial Complex, Greater Kailash Part II is currently under the possession of Shri Moti lal Bothra and Shri M. K. Jalan. Both of them would mutually agree on the market price of the property and if Mr. Jalan wants to buy the property at the agreed market price, he will have the first option on the same. Mr. K.L. Bothras (representative of Mr. Vinay Maloo) consent will be taken while determining the market price. 30% of the sale price will be given to Mr. M.K. Jalan (as mutually agreed between Mr. M.K. Jalan and Mr. Moti Lal Bothra), which will be kept in Escrow by Mr. M.K. Jalan for overall settlement of his account. Mr. Vinay Maloo confirms that this understanding is irrevocable. Date:
3. d August, 2010.
28. The counsel for the defendant no.2 has rightly argued that there is no mention even of the price and the plaintiff and the defendant no.1 cannot even be said to be parties to the said Agreement, and further that without any agreement as to price, the same cannot be an enforceable Agreement.
29. For all the aforesaid reasons I am of the view that the request of the defendant no.2, while not opposing the existing interim orders to be made absolute till the decision of the suit, seeking permission for letting out of the entire property is a reasonable one. No purpose would be served in allowing the property to lie unused during the pendency of the suit and which would only further deteriorate the property. This Court in Shri Ahjit Singh Vs. Smt. Adarsh Kaur Gill AIR 200.Delhi 205 has held that it is the duty of the Court to ensure that no unnecessary pecuniary loss is caused to the party ultimately found entitled to the property; it the property is under occupation and enjoyment, status quo can be maintained without allowing transfer, but where property is lying vacant and is capable of fetching income, the Court must permit utilization thereof. It may also be mentioned that in the event of the plaintiff losing the suit, unless the permission for such letting is granted, there would be no way to compensate the defendant no.2 from the losses which it would suffer for keeping its property unused.
30. Accordingly while making the earlier order dated 13 th December, 2011 directing all the parties to maintain status quo qua title and possession and construction of the property, absolute, the defendant no.2 is permitted to let out the entire property on the following terms:(a). that the said letting out will not be for more than three years. (b). that the defendant no.2 before parting with possession of the property to the tenant shall seek approval of the Lease Agreement from this Court. (c). that it will be a term of the said Lease Agreement that the letting will be subject to further orders in this proceeding and upon the tenant failing to vacate the property after the expiry of the period of the Lease and the plaintiff succeeding in the suit, the tenant shall be liable to be evicted therefrom by orders in this suit only.
31. As aforesaid, the defendant no.2 being the owner is entitled to rents of the other floors. As far as the rent of the first floor is concerned, taking a prima facie view of the matter it is felt that undertaking of the defendant no.2 and its Directors to in the event of the plaintiff succeeding in establishing that it was in possession of the first floor and has been forcefully dispossessed therefrom, they will reimburse the rent so earned of the first floor to the plaintiff, would sub-serve the ends of justice. The said undertaking be also filed while seeking approval of the proposed Lease Deed.
32. Needless to state that all observations made hereinabove are on a prima facie view of the matter and will have no bearing over the final adjudication in the suit.
33. The applications are disposed of. RAJIV SAHAI ENDLAW, J MAY 24.2013 pp..