Madan Lal Khanna and anr. Vs. the Lakshmi Vilas Bank Ltd. and anr.

Decided On : Sep-28-2004

Court : Delhi

Notice (8): Undefined index: topics [APP/View/Case/meta.ctp, line 36]
Code Context


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			'appellant' => 'Madan Lal Khanna and anr.',
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			'casename' => 'Madan Lal Khanna and anr. Vs. the Lakshmi Vilas Bank Ltd. and anr.',
			'casenote' => 'Contract - unwilling lessee - Sections 14, 34 and 41 of Specific Relief Act and Delhi Rent Control Act - whether unwilling lessee can be directed by interlocutory Order to continue as lessee till expiry of time for which lease was executed - plaintiff cannot pray for interim Order for continuance of lease as lessee was unwilling to continue - proper remedy for plaintiff is to seek damages for violation of terms of lease.


 -  -  If the Lesser has mortgaged the land as well as the right to recover the rent, the lessee cannot make a surrender of his lease in favor of the Lesser, because it was not competent to the Lesser to accept the surrender without the concurrence of the mortgagee. The Confirming party specifically assured and covenants with the Second Party that in the event of failure or default on the part of the First Party to refund the advance received from the Second Party to the Second Party at the time of the Second Party delivery back vacant possession of the Schedule property, they will pay the same without any objection and until the advance is refunded in full the Second Party is entitled to continue in the Schedule premises as a sub lessee or otherwise without payment of any monthly rent or other sums to the First Party and will have right to exploit the Schedule property for their advantage and derive income there from until the moneys are refunded or recovered and in which event the First Party shall not withhold any amenities including electricity, water etc. (b) as per the provisions of Sections 14, 34 and 41 of the Specific Relief Act, the suit restraining the termination of the lease is not maintainable, particularly, when the lease of 1996 came to an end by efflux of time in 2005; the lease like any other contract can be determined and even if there is unjustified termination of lease, no cause of action can be made out for seeking relief under the Specific Relief Act. The First Party as well as Confirming Party have agreed to execute a fresh sub lease for a further period of 6 years on expiry of lease period of first 9 years in respect of the Scheduled premises measuring about 1800 Sq. 1 Bank had been paid back cannot be the basis for an interim order and can at best be a factor relevant for determining the eventual and final rights of the parties and the quantum of damages if any, found payable.',
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			'casesref' => 'Smt. Shanti Devi vs. Amol Kumar Banerjee;',
			'citingcases' => '
Smt. Shanti Devi v. Amol Kumar Banerjee		Discussed

; ... .... ...; ... .... .....',
			'counselplain' => ' A.M. Singhvi and; A.S.Chandhiok, Sr. Advs. and ; Rahul Sriv',
			'counseldef' => ' Kailash Vasdev, Sr. Adv. and ; S. Arvindh, Adv. for defendant No. 1 and ; ',
			'court' => 'Delhi',
			'court_type' => 'HC',
			'decidedon' => '2004-09-28',
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			'judge' => ' Mukul Mudgal, J.',
			'judgement' => '<p style="text-align: justify;">Mukul Mudgal, J. </p><p style="text-align: justify;">1. The primary question arising in this application and the suit is whether an unwilling lessee can be directed by an interlocutory order to continue as a lessee beyond November 2005 on the ground that the lease deed upon renewal provided starting in November 2005 that the lessee was continue up to a particular period i.e. November 2011 until the expiry of the renewal period of the lease. The lease with the 1st defendant was initially for 9 years commencing from 1996 and provided for a renewal for six years i.e. up to 2011. There is a further plea of the plaintiff that it took a loan of Rs. 1,71,50,000/-, which was payable to the defendant No.1 with interest by the defendant by adjusting lease rentals up to November 2011. The lease rentals up to November 2011 were sufficient to pay the entire amount loaned by the defendant No.1 to the plaintiff. The defendant No.1 at the request of the plaintiff agreed to pay the lease money directly to defendant No. 2 upon the entire amount loaned to the plaintiff by the defendant NO.1 being returned to the plaintiff: Thus in addition to the loan of Rs. 8 crores already advanced to the plaintiff the defendant No.1 at the behest of the plaintiff, the sum of Rs. 1.25 crores was refunded to the defendant No.1 bank by the defendant No.2. Thus defendant No.2 advanced a sum of Rs. 9.25 crores to the plaintiff as a loan by taking the suit property as mortgaged security. The contention of the plaintiff/Lesser thus is that a lease deed for a fixed period could not be limited or curtailed by the lessee. The plaintiff further submits that the respondent No.1's plea that the respondent No.1's security deposit with the plaintiff equal to one year's rent should be adjusted towards their stay till November 2005 is not sustainable as the security deposit is only refundable after vacation of premises and such security deposit can not be adjusted towards payment of lease rentals as per the law laid down in 59(1999) DLT 515 and 103 (2002)DLT 572. The plaintiffs prayer in this application is thus two fold:</p><p style="text-align: justify;">a) The defendant No.1 be directed by an interim order to continue to stay on as a lessee till November 2011 at the agreed rent;</p><p style="text-align: justify;">b) the defendant No.1 be further directed to continue paying the monthly rent and not seek its adjustment from the security deposit.</p><p style="text-align: justify;">The prayer in the suit seeks a declaration that the defendant No.1 was obliged to renew the lease in November 2005 to extend it till November 2011.</p><p style="text-align: justify;">2. The plaintiff has thus contended that defendant No.1 had all along taken the premises on lease for a period of 15 years as per their letter dated 23rd July 1996 by which two leases for 9 years and 6 years which led to an agreement to sub lease between defendant No.1 and the plaintiff for a period of 9 years and the agreement to sub lease dated 30th November 1996 and 5th February 1997 categorically mentioned that after the expiry of 9 years the period will further execute a lease of 6 years. Consequently the lease dated 27th April 2001 for a period of 6 years have been executed by defendant No.1. As per defendant No.1 own calculations the period of loan was based on lease rentals payable till November 2001 and the loan period was 39 quarters starting from 29th March 2001. The defendant No.1 had given a total loan of Rs.9.25 crores which included a sum of Rs.1.25 crores remitted by defendant No.2 to defendant No.1 as per the conditions imposed by defendant No.1 on 15th March 2003. In this respect reliance has been placed on a decision of the Supreme Court in Smt. Shanti Devi vs. Amol Kumar Banerjee reported as AIR 1981 SC 1550 wherein it has been held:</p><p style="text-align: justify;">'The parties could not by their pleadings alter the intrinsic character of the lease or bring about a change of the rights and obligations flowing there from. The lease was a lease for a definite term and, thereforee, expired by efflux of time by reason of S. 111(a) of the Transfer of Property Act.'</p><p style="text-align: justify;">3. Reliance has also been placed on the following passage of Transfer of Property Act by S.K. Ray:</p><p style="text-align: justify;">' If the Lesser has mortgaged the land as well as the right to recover the rent, the lessee cannot make a surrender of his lease in favor of the Lesser, because it was not competent to the Lesser to accept the surrender without the concurrence of the mortgagee. The right to agree to the surrender of the lease did not remain the Lesser-mortgagor but passed to the mortgagee, and without the latter's consent the surrender was not valid. Consequently the lessee remained liable to pay rent to the mortgagee'</p><p style="text-align: justify;">4. The learned counsel for the plaintiff has further placed reliance on a judgment of the Bombay High Court in Havu V. Ganpati reported as 32 Bom. L.R. 689 in support of the above plea.</p><p style="text-align: justify;">5. It is, thereforee, submitted by the plaintiff that the correspondence exchanged between defendants 1 and 2 and the plaintiff lead to a compulsory inference that the contract stood concluded between them and the plaintiff had acted on such representations made and altered their position to their detriment. Had the defendant No.1 not agreed to the above mentioned agreement, the entire loan of the plaintiff qua the defendant No.1 would not have been realized by defendant No.2 and the plaintiff would not have agreed to defendant No.1 paying the lease rental directly to defendant No.2. The obligation arising out of rent leads to compulsory estoppel enforceable in law, particularly, by person such as plaintiff who acted upon such a promise. Defendant No.1 has refiled from the contract when it suits it. At the time the premises was given on lease there was no understanding or commitment that the plaintiff will seek a loan and defendant No.1 will give such a loan and, thereforee, the lease cannot be linked with the loan at this stage. The plaintiff had been punished by defendants for pre paying the loan as evident from the defendant No.1's letter dated 27.4.2001. Consequently the plaintiffs are entitled to be lease rental until the subsistence of the agreement.</p><p style="text-align: justify;">6. The defendant No.1, bank, placed reliance on clauses 7 and 10 of the agreement to lease which read as under:</p><p style="text-align: justify;">'7. Pursuant to the above the Second Party has this day paid the first party a sum of Rs.12,48,00/- (Rupees twelve lakhs forty eight thousand only) being the 50 per cent of agreed deposit by cheque bearing No. 271 223 dated 07/09/1996 on the Lakshmi Vilas Bank Ltd., Karol Bagh, New Delhi and drawn in favor of the First Party by way of initial advance which sum the first party hereby admits and acknowledge the receipt of the same on the execution of this agreement and balance deposit payable as per the area available shall be paid on execution of the lease deed in terms of this agreement.</p><p style="text-align: justify;"> ... .... ...10.The members of the Confirming Party jointly and severally agree and bind themselves and stand as guarantors for the First Party in the matter of performance of the obligations casted upon the First Party and also in the matter of repayment of the advance amount, at the time of the Second Party delivering back vacant possession of the Schedule property or earlier and basing on the said guarantee of the Confirming Party the Second Party has agreed to pay the huge advance. The Confirming party specifically assured and covenants with the Second Party that in the event of failure or default on the part of the First Party to refund the advance received from the Second Party to the Second Party at the time of the Second Party delivery back vacant possession of the Schedule property, they will pay the same without any objection and until the advance is refunded in full the Second Party is entitled to continue in the Schedule premises as a sub lessee or otherwise without payment of any monthly rent or other sums to the First Party and will have right to exploit the Schedule property for their advantage and derive income there from until the moneys are refunded or recovered and in which event the First Party shall not withhold any amenities including electricity, water etc. The First Party agrees for the same and both the First Party and the confirming party jointly and severally agree and bind themselves to promptly repay the advance without interest at the time of receiving back vacant possession.' </p><p style="text-align: justify;">7. It is also contended by defendant No.1 that the advance rent available to the plaintiff for one year i.e. up to 31st March 2005 is for ground floor Rs.48,74,880/- and basement Rs.36,09,144/-. On 27th April 2004 the bank communicated its decision to terminate its leases with effect from 1st April 2005 when it wants to hand over the possession to the plaintiff-landlord. Consequently the adjustment of advance rent was also sought. The defendant No.1 has also contended that the suit filed by the plaintiff deserves to be dismissed (a) as the suit is not properly valued for the purposes of court fees; (b) as per the provisions of Sections 14, 34 and 41 of the Specific Relief Act, the suit restraining the termination of the lease is not maintainable, particularly, when the lease of 1996 came to an end by efflux of time in 2005; the lease like any other contract can be determined and even if there is unjustified termination of lease, no cause of action can be made out for seeking relief under the Specific Relief Act. The adjustment of advance rent towards the future payment cannot be equated with adjustment of security deposit as contemplated by the judgments of this court and relied upon by the plaintiffs. In any case the said judgments were under the Delhi Rent Control Act and the present proceedings are not covered by Delhi Rent Control Act. It is also contended that in so far as the arrangement of repayment of any loan taken and/or any other financial engagement between the plaintiff and defendant No.2 is concerned, the defendant No.1 is not a party to such an agreement and there is no privity of contract and such a contract or obligations arising there from cannot thus bind defendant No.1.</p><p style="text-align: justify;">The relevant clauses in the sub lease dated 20th November 1996 entered into between the plaintiff and defendant No.1 are as under:</p><p style="text-align: justify;">' 1) The first party hereby granted sub lease of the schedule property and the second party hereby accepts the sub lease of the property described in the Schedule herein for a period of nine years from the date of the commencement of the lease.</p><p style="text-align: justify;"> ... .... .....4) That in consideration of the First Party agreeing to grant sub lease of the Schedule Property in terms contained herein the Second Party has agreed to pay the First Party a sum of Rs. 24,96,000/- representing one years rent as advance which is repayable by the First Party to the Second Party without interest at the time of the Second Party delivering back vacant possession of the Schedule Property. That on the expiry of the first three years of lease the Second Party shall pay a sum equivalent to one year's enhanced portion of rent to the First Party and on the expiry of the sixth year from the date of commencement of lease the Second Party shall pay again one year's enhanced portion of rent of the First Party and the amounts paid as above to the First Party as deposit shall be refunded to the Second Party at the time of delivering back vacant possession of the Schedule premises without interest.' </p><p style="text-align: justify;">The agreement dated 30th November 1996 contained the renewal clause reading as under:</p><p style="text-align: justify;">'The First Party as well as Confirming Party have agreed to execute a fresh sub lease for a further period of 6 years on expiry of lease period of first 9 years in respect of the Scheduled premises measuring about 1800 Sq. Ft. of super built up area situated on the Ground at the rear portion at the rear opening on the service road in property bearing No. 74/8, Janpath, New Delhi as marked red in the site plan attached to this agreement on the same terms and conditions as mentioned in the said agreement dated 09/9/1996 except that the rent will be enhanced by 25% on the expiry of every three years. Rest of the terms and conditions of the fresh sub-lease to be executed after expiry of the sub-lease aforesaid shall remain the same and binding on the parties.'</p><p style="text-align: justify;">9. I am of the view that even if the averments of the plaintiff are accepted to be correct to the effect that the intrinsic character of the lease cannot be altered and a lease for a definite term executed on 27-4-2001 pursuant to the agreement dated 30th November, 1996 could only expire by efflux of time, the plaintiff could not pray for an interim order for continuance of the lease. The remedy for the plaintiff in such a situation is to seek damages for violation of its rights and it cannot seek an interim order directing the continuance of a relationship of Lesser and Lessee when the Lessee was unwilling to continue. The fact that there are transactions of loan between the parties and the loan taken by the plaintiff from the defendant No. 1 Bank had been paid back cannot be the basis for an interim order and can at best be a factor relevant for determining the eventual and final rights of the parties and the quantum of damages if any, found payable. In any case there is no tripartite contract between the parties signed by three parties and the plea that the inter se contracts and correspondence between the plaintiff and the defendant No. 1 and the plaintiff and the defendant No. 2, constituted such a tripartite agreement cannot be accepted at this stage. I am unable to accede to the prayer of the plaintiff that facts of the case indicated compulsory estoppel by the representation of the parties by virtue of which estoppel the rights of the plaintiff are enforceable at this interim stage.</p><p style="text-align: justify;">10. The defendant No. 1 Bank had averred that in respect of rent from the date indicated in the notice to quit and up to 31st March, 2005, it is prepared to secure the said amount by depositing the bank guarantee in this Court so that at the time of vacation of the premises if any dues are payable they can be adjusted upon an inspection of the premises. </p><p style="text-align: justify;">11. Since I am not inclined to agree with the prayer for interim relief made by the learned counsel for the plaintiff and while there is some substance in the plea that the security deposited may not be adjustable in advance towards rent, in view of the position of law laid down in judgments of this Court reported in : 59(1995)DLT515 and 103(2003) DLT 572, the interest of justice would require that a suitable arrangement be made to protect the interest of the plaintiff. Accordingly, the defendant is directed to deposit in this Court a bank guarantee for the rent for the period from 1st May, 2004 till 31st March, 2005 towards the rent of the premises. This deposit of a bank guarantee would adequately secure the rights of the plaintiff which may ensure to the benefit of the plaintiff at the time when the defendant No. 1 seeks to hand over possession of the premises to the plaintiff on 1st April, 2005 and no prejudice would be caused to it by the adjustment of the security deposit towards rent. At the date when the suit premises are being vacated by the defendant No. 1 a local commissioner will ascertain the physical condition of the suit premises. Accordingly, the application filed by the plaintiff is allowed to a limited extent that the defendant No. 1 Bank is directed to submit a bank guarantee as detailed above with this Court within three weeks from today to the satisfaction of the Registrar of this Court. </p><p style="text-align: justify;">11. The application stands disposed of accordingly.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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	),
	'GPE' => array(
		(int) 0 => 'Smt',
		(int) 1 => 'New Delhi',
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	'MONEY' => array(
		(int) 0 => '50 per cent'
	),
	'PERCENT' => array(
		(int) 0 => '25%'
	)
)
$desc = array(
	'Judgement' => array(
		'id' => '700838',
		'acts' => 'Specific Relief Act - Sections 14, 34 and 41; ;Delhi Rent Control Act',
		'appealno' => 'IA No. 4640/2004 in CS(OS) No. 795/2004',
		'appellant' => 'Madan Lal Khanna and anr.',
		'authreffered' => '',
		'casename' => 'Madan Lal Khanna and anr. Vs. the Lakshmi Vilas Bank Ltd. and anr.',
		'casenote' => 'Contract - unwilling lessee - Sections 14, 34 and 41 of Specific Relief Act and Delhi Rent Control Act - whether unwilling lessee can be directed by interlocutory Order to continue as lessee till expiry of time for which lease was executed - plaintiff cannot pray for interim Order for continuance of lease as lessee was unwilling to continue - proper remedy for plaintiff is to seek damages for violation of terms of lease.


 -  -  If the Lesser has mortgaged the land as well as the right to recover the rent, the lessee cannot make a surrender of his lease in favor of the Lesser, because it was not competent to the Lesser to accept the surrender without the concurrence of the mortgagee. The Confirming party specifically assured and covenants with the Second Party that in the event of failure or default on the part of the First Party to refund the advance received from the Second Party to the Second Party at the time of the Second Party delivery back vacant possession of the Schedule property, they will pay the same without any objection and until the advance is refunded in full the Second Party is entitled to continue in the Schedule premises as a sub lessee or otherwise without payment of any monthly rent or other sums to the First Party and will have right to exploit the Schedule property for their advantage and derive income there from until the moneys are refunded or recovered and in which event the First Party shall not withhold any amenities including electricity, water etc. (b) as per the provisions of Sections 14, 34 and 41 of the Specific Relief Act, the suit restraining the termination of the lease is not maintainable, particularly, when the lease of 1996 came to an end by efflux of time in 2005; the lease like any other contract can be determined and even if there is unjustified termination of lease, no cause of action can be made out for seeking relief under the Specific Relief Act. The First Party as well as Confirming Party have agreed to execute a fresh sub lease for a further period of 6 years on expiry of lease period of first 9 years in respect of the Scheduled premises measuring about 1800 Sq. 1 Bank had been paid back cannot be the basis for an interim order and can at best be a factor relevant for determining the eventual and final rights of the parties and the quantum of damages if any, found payable.',
		'caseanalysis' => null,
		'casesref' => 'Smt. Shanti Devi vs. Amol Kumar Banerjee;',
		'citingcases' => '
Smt. Shanti Devi v. Amol Kumar Banerjee		Discussed

; ... .... ...; ... .... .....',
		'counselplain' => ' A.M. Singhvi and; A.S.Chandhiok, Sr. Advs. and ; Rahul Sriv',
		'counseldef' => ' Kailash Vasdev, Sr. Adv. and ; S. Arvindh, Adv. for defendant No. 1 and ; ',
		'court' => 'Delhi',
		'court_type' => 'HC',
		'decidedon' => '2004-09-28',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => ' Mukul Mudgal, J.',
		'judgement' => '<p style="text-align: justify;">Mukul Mudgal, J. </p><p style="text-align: justify;">1. The primary question arising in this application and the suit is whether an unwilling lessee can be directed by an interlocutory order to continue as a lessee beyond November 2005 on the ground that the lease deed upon renewal provided starting in November 2005 that the lessee was continue up to a particular period i.e. November 2011 until the expiry of the renewal period of the lease. The lease with the 1st defendant was initially for 9 years commencing from 1996 and provided for a renewal for six years i.e. up to 2011. There is a further plea of the plaintiff that it took a loan of Rs. 1,71,50,000/-, which was payable to the defendant No.1 with interest by the defendant by adjusting lease rentals up to November 2011. The lease rentals up to November 2011 were sufficient to pay the entire amount loaned by the defendant No.1 to the plaintiff. The defendant No.1 at the request of the plaintiff agreed to pay the lease money directly to defendant No. 2 upon the entire amount loaned to the plaintiff by the defendant NO.1 being returned to the plaintiff: Thus in addition to the loan of Rs. 8 crores already advanced to the plaintiff the defendant No.1 at the behest of the plaintiff, the sum of Rs. 1.25 crores was refunded to the defendant No.1 bank by the defendant No.2. Thus defendant No.2 advanced a sum of Rs. 9.25 crores to the plaintiff as a loan by taking the suit property as mortgaged security. The contention of the plaintiff/Lesser thus is that a lease deed for a fixed period could not be limited or curtailed by the lessee. The plaintiff further submits that the respondent No.1's plea that the respondent No.1's security deposit with the plaintiff equal to one year's rent should be adjusted towards their stay till November 2005 is not sustainable as the security deposit is only refundable after vacation of premises and such security deposit can not be adjusted towards payment of lease rentals as per the law laid down in 59(1999) DLT 515 and 103 (2002)DLT 572. The plaintiffs prayer in this application is thus two fold:</p><p style="text-align: justify;">a) The defendant No.1 be directed by an interim order to continue to stay on as a lessee till November 2011 at the agreed rent;</p><p style="text-align: justify;">b) the defendant No.1 be further directed to continue paying the monthly rent and not seek its adjustment from the security deposit.</p><p style="text-align: justify;">The prayer in the suit seeks a declaration that the defendant No.1 was obliged to renew the lease in November 2005 to extend it till November 2011.</p><p style="text-align: justify;">2. The plaintiff has thus contended that defendant No.1 had all along taken the premises on lease for a period of 15 years as per their letter dated 23rd July 1996 by which two leases for 9 years and 6 years which led to an agreement to sub lease between defendant No.1 and the plaintiff for a period of 9 years and the agreement to sub lease dated 30th November 1996 and 5th February 1997 categorically mentioned that after the expiry of 9 years the period will further execute a lease of 6 years. Consequently the lease dated 27th April 2001 for a period of 6 years have been executed by defendant No.1. As per defendant No.1 own calculations the period of loan was based on lease rentals payable till November 2001 and the loan period was 39 quarters starting from 29th March 2001. The defendant No.1 had given a total loan of Rs.9.25 crores which included a sum of Rs.1.25 crores remitted by defendant No.2 to defendant No.1 as per the conditions imposed by defendant No.1 on 15th March 2003. In this respect reliance has been placed on a decision of the Supreme Court in Smt. Shanti Devi vs. Amol Kumar Banerjee reported as AIR 1981 SC 1550 wherein it has been held:</p><p style="text-align: justify;">'The parties could not by their pleadings alter the intrinsic character of the lease or bring about a change of the rights and obligations flowing there from. The lease was a lease for a definite term and, thereforee, expired by efflux of time by reason of S. 111(a) of the Transfer of Property Act.'</p><p style="text-align: justify;">3. Reliance has also been placed on the following passage of Transfer of Property Act by S.K. Ray:</p><p style="text-align: justify;">' If the Lesser has mortgaged the land as well as the right to recover the rent, the lessee cannot make a surrender of his lease in favor of the Lesser, because it was not competent to the Lesser to accept the surrender without the concurrence of the mortgagee. The right to agree to the surrender of the lease did not remain the Lesser-mortgagor but passed to the mortgagee, and without the latter's consent the surrender was not valid. Consequently the lessee remained liable to pay rent to the mortgagee'</p><p style="text-align: justify;">4. The learned counsel for the plaintiff has further placed reliance on a judgment of the Bombay High Court in Havu V. Ganpati reported as 32 Bom. L.R. 689 in support of the above plea.</p><p style="text-align: justify;">5. It is, thereforee, submitted by the plaintiff that the correspondence exchanged between defendants 1 and 2 and the plaintiff lead to a compulsory inference that the contract stood concluded between them and the plaintiff had acted on such representations made and altered their position to their detriment. Had the defendant No.1 not agreed to the above mentioned agreement, the entire loan of the plaintiff qua the defendant No.1 would not have been realized by defendant No.2 and the plaintiff would not have agreed to defendant No.1 paying the lease rental directly to defendant No.2. The obligation arising out of rent leads to compulsory estoppel enforceable in law, particularly, by person such as plaintiff who acted upon such a promise. Defendant No.1 has refiled from the contract when it suits it. At the time the premises was given on lease there was no understanding or commitment that the plaintiff will seek a loan and defendant No.1 will give such a loan and, thereforee, the lease cannot be linked with the loan at this stage. The plaintiff had been punished by defendants for pre paying the loan as evident from the defendant No.1's letter dated 27.4.2001. Consequently the plaintiffs are entitled to be lease rental until the subsistence of the agreement.</p><p style="text-align: justify;">6. The defendant No.1, bank, placed reliance on clauses 7 and 10 of the agreement to lease which read as under:</p><p style="text-align: justify;">'7. Pursuant to the above the Second Party has this day paid the first party a sum of Rs.12,48,00/- (Rupees twelve lakhs forty eight thousand only) being the 50 per cent of agreed deposit by cheque bearing No. 271 223 dated 07/09/1996 on the Lakshmi Vilas Bank Ltd., Karol Bagh, New Delhi and drawn in favor of the First Party by way of initial advance which sum the first party hereby admits and acknowledge the receipt of the same on the execution of this agreement and balance deposit payable as per the area available shall be paid on execution of the lease deed in terms of this agreement.</p><p style="text-align: justify;"> ... .... ...10.The members of the Confirming Party jointly and severally agree and bind themselves and stand as guarantors for the First Party in the matter of performance of the obligations casted upon the First Party and also in the matter of repayment of the advance amount, at the time of the Second Party delivering back vacant possession of the Schedule property or earlier and basing on the said guarantee of the Confirming Party the Second Party has agreed to pay the huge advance. The Confirming party specifically assured and covenants with the Second Party that in the event of failure or default on the part of the First Party to refund the advance received from the Second Party to the Second Party at the time of the Second Party delivery back vacant possession of the Schedule property, they will pay the same without any objection and until the advance is refunded in full the Second Party is entitled to continue in the Schedule premises as a sub lessee or otherwise without payment of any monthly rent or other sums to the First Party and will have right to exploit the Schedule property for their advantage and derive income there from until the moneys are refunded or recovered and in which event the First Party shall not withhold any amenities including electricity, water etc. The First Party agrees for the same and both the First Party and the confirming party jointly and severally agree and bind themselves to promptly repay the advance without interest at the time of receiving back vacant possession.' </p><p style="text-align: justify;">7. It is also contended by defendant No.1 that the advance rent available to the plaintiff for one year i.e. up to 31st March 2005 is for ground floor Rs.48,74,880/- and basement Rs.36,09,144/-. On 27th April 2004 the bank communicated its decision to terminate its leases with effect from 1st April 2005 when it wants to hand over the possession to the plaintiff-landlord. Consequently the adjustment of advance rent was also sought. The defendant No.1 has also contended that the suit filed by the plaintiff deserves to be dismissed (a) as the suit is not properly valued for the purposes of court fees; (b) as per the provisions of Sections 14, 34 and 41 of the Specific Relief Act, the suit restraining the termination of the lease is not maintainable, particularly, when the lease of 1996 came to an end by efflux of time in 2005; the lease like any other contract can be determined and even if there is unjustified termination of lease, no cause of action can be made out for seeking relief under the Specific Relief Act. The adjustment of advance rent towards the future payment cannot be equated with adjustment of security deposit as contemplated by the judgments of this court and relied upon by the plaintiffs. In any case the said judgments were under the Delhi Rent Control Act and the present proceedings are not covered by Delhi Rent Control Act. It is also contended that in so far as the arrangement of repayment of any loan taken and/or any other financial engagement between the plaintiff and defendant No.2 is concerned, the defendant No.1 is not a party to such an agreement and there is no privity of contract and such a contract or obligations arising there from cannot thus bind defendant No.1.</p><p style="text-align: justify;">The relevant clauses in the sub lease dated 20th November 1996 entered into between the plaintiff and defendant No.1 are as under:</p><p style="text-align: justify;">' 1) The first party hereby granted sub lease of the schedule property and the second party hereby accepts the sub lease of the property described in the Schedule herein for a period of nine years from the date of the commencement of the lease.</p><p style="text-align: justify;"> ... .... .....4) That in consideration of the First Party agreeing to grant sub lease of the Schedule Property in terms contained herein the Second Party has agreed to pay the First Party a sum of Rs. 24,96,000/- representing one years rent as advance which is repayable by the First Party to the Second Party without interest at the time of the Second Party delivering back vacant possession of the Schedule Property. That on the expiry of the first three years of lease the Second Party shall pay a sum equivalent to one year's enhanced portion of rent to the First Party and on the expiry of the sixth year from the date of commencement of lease the Second Party shall pay again one year's enhanced portion of rent of the First Party and the amounts paid as above to the First Party as deposit shall be refunded to the Second Party at the time of delivering back vacant possession of the Schedule premises without interest.' </p><p style="text-align: justify;">The agreement dated 30th November 1996 contained the renewal clause reading as under:</p><p style="text-align: justify;">'The First Party as well as Confirming Party have agreed to execute a fresh sub lease for a further period of 6 years on expiry of lease period of first 9 years in respect of the Scheduled premises measuring about 1800 Sq. Ft. of super built up area situated on the Ground at the rear portion at the rear opening on the service road in property bearing No. 74/8, Janpath, New Delhi as marked red in the site plan attached to this agreement on the same terms and conditions as mentioned in the said agreement dated 09/9/1996 except that the rent will be enhanced by 25% on the expiry of every three years. Rest of the terms and conditions of the fresh sub-lease to be executed after expiry of the sub-lease aforesaid shall remain the same and binding on the parties.'</p><p style="text-align: justify;">9. I am of the view that even if the averments of the plaintiff are accepted to be correct to the effect that the intrinsic character of the lease cannot be altered and a lease for a definite term executed on 27-4-2001 pursuant to the agreement dated 30th November, 1996 could only expire by efflux of time, the plaintiff could not pray for an interim order for continuance of the lease. The remedy for the plaintiff in such a situation is to seek damages for violation of its rights and it cannot seek an interim order directing the continuance of a relationship of Lesser and Lessee when the Lessee was unwilling to continue. The fact that there are transactions of loan between the parties and the loan taken by the plaintiff from the defendant No. 1 Bank had been paid back cannot be the basis for an interim order and can at best be a factor relevant for determining the eventual and final rights of the parties and the quantum of damages if any, found payable. In any case there is no tripartite contract between the parties signed by three parties and the plea that the inter se contracts and correspondence between the plaintiff and the defendant No. 1 and the plaintiff and the defendant No. 2, constituted such a tripartite agreement cannot be accepted at this stage. I am unable to accede to the prayer of the plaintiff that facts of the case indicated compulsory estoppel by the representation of the parties by virtue of which estoppel the rights of the plaintiff are enforceable at this interim stage.</p><p style="text-align: justify;">10. The defendant No. 1 Bank had averred that in respect of rent from the date indicated in the notice to quit and up to 31st March, 2005, it is prepared to secure the said amount by depositing the bank guarantee in this Court so that at the time of vacation of the premises if any dues are payable they can be adjusted upon an inspection of the premises. </p><p style="text-align: justify;">11. Since I am not inclined to agree with the prayer for interim relief made by the learned counsel for the plaintiff and while there is some substance in the plea that the security deposited may not be adjustable in advance towards rent, in view of the position of law laid down in judgments of this Court reported in : 59(1995)DLT515 and 103(2003) DLT 572, the interest of justice would require that a suitable arrangement be made to protect the interest of the plaintiff. Accordingly, the defendant is directed to deposit in this Court a bank guarantee for the rent for the period from 1st May, 2004 till 31st March, 2005 towards the rent of the premises. This deposit of a bank guarantee would adequately secure the rights of the plaintiff which may ensure to the benefit of the plaintiff at the time when the defendant No. 1 seeks to hand over possession of the premises to the plaintiff on 1st April, 2005 and no prejudice would be caused to it by the adjustment of the security deposit towards rent. At the date when the suit premises are being vacated by the defendant No. 1 a local commissioner will ascertain the physical condition of the suit premises. Accordingly, the application filed by the plaintiff is allowed to a limited extent that the defendant No. 1 Bank is directed to submit a bank guarantee as detailed above with this Court within three weeks from today to the satisfaction of the Registrar of this Court. </p><p style="text-align: justify;">11. The application stands disposed of accordingly.<p style="text-align: justify;"></p><p style="text-align: justify;">',
		'observations' => null,
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		'pubs' => '114(2004)DLT310; 2004(77)DRJ266',
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		'respondent' => 'The Lakshmi Vilas Bank Ltd. and anr.',
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Warning (2): Invalid argument supplied for foreach() [APP/View/Case/meta.ctp, line 39]
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			(int) 45 => 'Lesser and Lessee',
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		'GPE' => array(
			(int) 0 => 'Smt',
			(int) 1 => 'New Delhi',
			(int) 2 => 'New Delhi'
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			(int) 0 => '50 per cent'
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			(int) 0 => '25%'
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		'Judgement' => array(
			'id' => '700838',
			'acts' => 'Specific Relief Act - Sections 14, 34 and 41; ;Delhi Rent Control Act',
			'appealno' => 'IA No. 4640/2004 in CS(OS) No. 795/2004',
			'appellant' => 'Madan Lal Khanna and anr.',
			'authreffered' => '',
			'casename' => 'Madan Lal Khanna and anr. Vs. the Lakshmi Vilas Bank Ltd. and anr.',
			'casenote' => 'Contract - unwilling lessee - Sections 14, 34 and 41 of Specific Relief Act and Delhi Rent Control Act - whether unwilling lessee can be directed by interlocutory Order to continue as lessee till expiry of time for which lease was executed - plaintiff cannot pray for interim Order for continuance of lease as lessee was unwilling to continue - proper remedy for plaintiff is to seek damages for violation of terms of lease.


 -  -  If the Lesser has mortgaged the land as well as the right to recover the rent, the lessee cannot make a surrender of his lease in favor of the Lesser, because it was not competent to the Lesser to accept the surrender without the concurrence of the mortgagee. The Confirming party specifically assured and covenants with the Second Party that in the event of failure or default on the part of the First Party to refund the advance received from the Second Party to the Second Party at the time of the Second Party delivery back vacant possession of the Schedule property, they will pay the same without any objection and until the advance is refunded in full the Second Party is entitled to continue in the Schedule premises as a sub lessee or otherwise without payment of any monthly rent or other sums to the First Party and will have right to exploit the Schedule property for their advantage and derive income there from until the moneys are refunded or recovered and in which event the First Party shall not withhold any amenities including electricity, water etc. (b) as per the provisions of Sections 14, 34 and 41 of the Specific Relief Act, the suit restraining the termination of the lease is not maintainable, particularly, when the lease of 1996 came to an end by efflux of time in 2005; the lease like any other contract can be determined and even if there is unjustified termination of lease, no cause of action can be made out for seeking relief under the Specific Relief Act. The First Party as well as Confirming Party have agreed to execute a fresh sub lease for a further period of 6 years on expiry of lease period of first 9 years in respect of the Scheduled premises measuring about 1800 Sq. 1 Bank had been paid back cannot be the basis for an interim order and can at best be a factor relevant for determining the eventual and final rights of the parties and the quantum of damages if any, found payable.',
			'caseanalysis' => null,
			'casesref' => 'Smt. Shanti Devi vs. Amol Kumar Banerjee;',
			'citingcases' => '
Smt. Shanti Devi v. Amol Kumar Banerjee		Discussed

; ... .... ...; ... .... .....',
			'counselplain' => ' A.M. Singhvi and; A.S.Chandhiok, Sr. Advs. and ; Rahul Sriv',
			'counseldef' => ' Kailash Vasdev, Sr. Adv. and ; S. Arvindh, Adv. for defendant No. 1 and ; ',
			'court' => 'Delhi',
			'court_type' => 'HC',
			'decidedon' => '2004-09-28',
			'deposition' => '',
			'favorof' => null,
			'findings' => null,
			'judge' => ' Mukul Mudgal, J.',
			'judgement' => '<p style="text-align: justify;">Mukul Mudgal, J. </p><p style="text-align: justify;">1. The primary question arising in this application and the suit is whether an unwilling lessee can be directed by an interlocutory order to continue as a lessee beyond November 2005 on the ground that the lease deed upon renewal provided starting in November 2005 that the lessee was continue up to a particular period i.e. November 2011 until the expiry of the renewal period of the lease. The lease with the 1st defendant was initially for 9 years commencing from 1996 and provided for a renewal for six years i.e. up to 2011. There is a further plea of the plaintiff that it took a loan of Rs. 1,71,50,000/-, which was payable to the defendant No.1 with interest by the defendant by adjusting lease rentals up to November 2011. The lease rentals up to November 2011 were sufficient to pay the entire amount loaned by the defendant No.1 to the plaintiff. The defendant No.1 at the request of the plaintiff agreed to pay the lease money directly to defendant No. 2 upon the entire amount loaned to the plaintiff by the defendant NO.1 being returned to the plaintiff: Thus in addition to the loan of Rs. 8 crores already advanced to the plaintiff the defendant No.1 at the behest of the plaintiff, the sum of Rs. 1.25 crores was refunded to the defendant No.1 bank by the defendant No.2. Thus defendant No.2 advanced a sum of Rs. 9.25 crores to the plaintiff as a loan by taking the suit property as mortgaged security. The contention of the plaintiff/Lesser thus is that a lease deed for a fixed period could not be limited or curtailed by the lessee. The plaintiff further submits that the respondent No.1's plea that the respondent No.1's security deposit with the plaintiff equal to one year's rent should be adjusted towards their stay till November 2005 is not sustainable as the security deposit is only refundable after vacation of premises and such security deposit can not be adjusted towards payment of lease rentals as per the law laid down in 59(1999) DLT 515 and 103 (2002)DLT 572. The plaintiffs prayer in this application is thus two fold:</p><p style="text-align: justify;">a) The defendant No.1 be directed by an interim order to continue to stay on as a lessee till November 2011 at the agreed rent;</p><p style="text-align: justify;">b) the defendant No.1 be further directed to continue paying the monthly rent and not seek its adjustment from the security deposit.</p><p style="text-align: justify;">The prayer in the suit seeks a declaration that the defendant No.1 was obliged to renew the lease in November 2005 to extend it till November 2011.</p><p style="text-align: justify;">2. The plaintiff has thus contended that defendant No.1 had all along taken the premises on lease for a period of 15 years as per their letter dated 23rd July 1996 by which two leases for 9 years and 6 years which led to an agreement to sub lease between defendant No.1 and the plaintiff for a period of 9 years and the agreement to sub lease dated 30th November 1996 and 5th February 1997 categorically mentioned that after the expiry of 9 years the period will further execute a lease of 6 years. Consequently the lease dated 27th April 2001 for a period of 6 years have been executed by defendant No.1. As per defendant No.1 own calculations the period of loan was based on lease rentals payable till November 2001 and the loan period was 39 quarters starting from 29th March 2001. The defendant No.1 had given a total loan of Rs.9.25 crores which included a sum of Rs.1.25 crores remitted by defendant No.2 to defendant No.1 as per the conditions imposed by defendant No.1 on 15th March 2003. In this respect reliance has been placed on a decision of the Supreme Court in Smt. Shanti Devi vs. Amol Kumar Banerjee reported as AIR 1981 SC 1550 wherein it has been held:</p><p style="text-align: justify;">'The parties could not by their pleadings alter the intrinsic character of the lease or bring about a change of the rights and obligations flowing there from. The lease was a lease for a definite term and, thereforee, expired by efflux of time by reason of S. 111(a) of the Transfer of Property Act.'</p><p style="text-align: justify;">3. Reliance has also been placed on the following passage of Transfer of Property Act by S.K. Ray:</p><p style="text-align: justify;">' If the Lesser has mortgaged the land as well as the right to recover the rent, the lessee cannot make a surrender of his lease in favor of the Lesser, because it was not competent to the Lesser to accept the surrender without the concurrence of the mortgagee. The right to agree to the surrender of the lease did not remain the Lesser-mortgagor but passed to the mortgagee, and without the latter's consent the surrender was not valid. Consequently the lessee remained liable to pay rent to the mortgagee'</p><p style="text-align: justify;">4. The learned counsel for the plaintiff has further placed reliance on a judgment of the Bombay High Court in Havu V. Ganpati reported as 32 Bom. L.R. 689 in support of the above plea.</p><p style="text-align: justify;">5. It is, thereforee, submitted by the plaintiff that the correspondence exchanged between defendants 1 and 2 and the plaintiff lead to a compulsory inference that the contract stood concluded between them and the plaintiff had acted on such representations made and altered their position to their detriment. Had the defendant No.1 not agreed to the above mentioned agreement, the entire loan of the plaintiff qua the defendant No.1 would not have been realized by defendant No.2 and the plaintiff would not have agreed to defendant No.1 paying the lease rental directly to defendant No.2. The obligation arising out of rent leads to compulsory estoppel enforceable in law, particularly, by person such as plaintiff who acted upon such a promise. Defendant No.1 has refiled from the contract when it suits it. At the time the premises was given on lease there was no understanding or commitment that the plaintiff will seek a loan and defendant No.1 will give such a loan and, thereforee, the lease cannot be linked with the loan at this stage. The plaintiff had been punished by defendants for pre paying the loan as evident from the defendant No.1's letter dated 27.4.2001. Consequently the plaintiffs are entitled to be lease rental until the subsistence of the agreement.</p><p style="text-align: justify;">6. The defendant No.1, bank, placed reliance on clauses 7 and 10 of the agreement to lease which read as under:</p><p style="text-align: justify;">'7. Pursuant to the above the Second Party has this day paid the first party a sum of Rs.12,48,00/- (Rupees twelve lakhs forty eight thousand only) being the 50 per cent of agreed deposit by cheque bearing No. 271 223 dated 07/09/1996 on the Lakshmi Vilas Bank Ltd., Karol Bagh, New Delhi and drawn in favor of the First Party by way of initial advance which sum the first party hereby admits and acknowledge the receipt of the same on the execution of this agreement and balance deposit payable as per the area available shall be paid on execution of the lease deed in terms of this agreement.</p><p style="text-align: justify;"> ... .... ...10.The members of the Confirming Party jointly and severally agree and bind themselves and stand as guarantors for the First Party in the matter of performance of the obligations casted upon the First Party and also in the matter of repayment of the advance amount, at the time of the Second Party delivering back vacant possession of the Schedule property or earlier and basing on the said guarantee of the Confirming Party the Second Party has agreed to pay the huge advance. The Confirming party specifically assured and covenants with the Second Party that in the event of failure or default on the part of the First Party to refund the advance received from the Second Party to the Second Party at the time of the Second Party delivery back vacant possession of the Schedule property, they will pay the same without any objection and until the advance is refunded in full the Second Party is entitled to continue in the Schedule premises as a sub lessee or otherwise without payment of any monthly rent or other sums to the First Party and will have right to exploit the Schedule property for their advantage and derive income there from until the moneys are refunded or recovered and in which event the First Party shall not withhold any amenities including electricity, water etc. The First Party agrees for the same and both the First Party and the confirming party jointly and severally agree and bind themselves to promptly repay the advance without interest at the time of receiving back vacant possession.' </p><p style="text-align: justify;">7. It is also contended by defendant No.1 that the advance rent available to the plaintiff for one year i.e. up to 31st March 2005 is for ground floor Rs.48,74,880/- and basement Rs.36,09,144/-. On 27th April 2004 the bank communicated its decision to terminate its leases with effect from 1st April 2005 when it wants to hand over the possession to the plaintiff-landlord. Consequently the adjustment of advance rent was also sought. The defendant No.1 has also contended that the suit filed by the plaintiff deserves to be dismissed (a) as the suit is not properly valued for the purposes of court fees; (b) as per the provisions of Sections 14, 34 and 41 of the Specific Relief Act, the suit restraining the termination of the lease is not maintainable, particularly, when the lease of 1996 came to an end by efflux of time in 2005; the lease like any other contract can be determined and even if there is unjustified termination of lease, no cause of action can be made out for seeking relief under the Specific Relief Act. The adjustment of advance rent towards the future payment cannot be equated with adjustment of security deposit as contemplated by the judgments of this court and relied upon by the plaintiffs. In any case the said judgments were under the Delhi Rent Control Act and the present proceedings are not covered by Delhi Rent Control Act. It is also contended that in so far as the arrangement of repayment of any loan taken and/or any other financial engagement between the plaintiff and defendant No.2 is concerned, the defendant No.1 is not a party to such an agreement and there is no privity of contract and such a contract or obligations arising there from cannot thus bind defendant No.1.</p><p style="text-align: justify;">The relevant clauses in the sub lease dated 20th November 1996 entered into between the plaintiff and defendant No.1 are as under:</p><p style="text-align: justify;">' 1) The first party hereby granted sub lease of the schedule property and the second party hereby accepts the sub lease of the property described in the Schedule herein for a period of nine years from the date of the commencement of the lease.</p><p style="text-align: justify;"> ... .... .....4) That in consideration of the First Party agreeing to grant sub lease of the Schedule Property in terms contained herein the Second Party has agreed to pay the First Party a sum of Rs. 24,96,000/- representing one years rent as advance which is repayable by the First Party to the Second Party without interest at the time of the Second Party delivering back vacant possession of the Schedule Property. That on the expiry of the first three years of lease the Second Party shall pay a sum equivalent to one year's enhanced portion of rent to the First Party and on the expiry of the sixth year from the date of commencement of lease the Second Party shall pay again one year's enhanced portion of rent of the First Party and the amounts paid as above to the First Party as deposit shall be refunded to the Second Party at the time of delivering back vacant possession of the Schedule premises without interest.' </p><p style="text-align: justify;">The agreement dated 30th November 1996 contained the renewal clause reading as under:</p><p style="text-align: justify;">'The First Party as well as Confirming Party have agreed to execute a fresh sub lease for a further period of 6 years on expiry of lease period of first 9 years in respect of the Scheduled premises measuring about 1800 Sq. Ft. of super built up area situated on the Ground at the rear portion at the rear opening on the service road in property bearing No. 74/8, Janpath, New Delhi as marked red in the site plan attached to this agreement on the same terms and conditions as mentioned in the said agreement dated 09/9/1996 except that the rent will be enhanced by 25% on the expiry of every three years. Rest of the terms and conditions of the fresh sub-lease to be executed after expiry of the sub-lease aforesaid shall remain the same and binding on the parties.'</p><p style="text-align: justify;">9. I am of the view that even if the averments of the plaintiff are accepted to be correct to the effect that the intrinsic character of the lease cannot be altered and a lease for a definite term executed on 27-4-2001 pursuant to the agreement dated 30th November, 1996 could only expire by efflux of time, the plaintiff could not pray for an interim order for continuance of the lease. The remedy for the plaintiff in such a situation is to seek damages for violation of its rights and it cannot seek an interim order directing the continuance of a relationship of Lesser and Lessee when the Lessee was unwilling to continue. The fact that there are transactions of loan between the parties and the loan taken by the plaintiff from the defendant No. 1 Bank had been paid back cannot be the basis for an interim order and can at best be a factor relevant for determining the eventual and final rights of the parties and the quantum of damages if any, found payable. In any case there is no tripartite contract between the parties signed by three parties and the plea that the inter se contracts and correspondence between the plaintiff and the defendant No. 1 and the plaintiff and the defendant No. 2, constituted such a tripartite agreement cannot be accepted at this stage. I am unable to accede to the prayer of the plaintiff that facts of the case indicated compulsory estoppel by the representation of the parties by virtue of which estoppel the rights of the plaintiff are enforceable at this interim stage.</p><p style="text-align: justify;">10. The defendant No. 1 Bank had averred that in respect of rent from the date indicated in the notice to quit and up to 31st March, 2005, it is prepared to secure the said amount by depositing the bank guarantee in this Court so that at the time of vacation of the premises if any dues are payable they can be adjusted upon an inspection of the premises. </p><p style="text-align: justify;">11. Since I am not inclined to agree with the prayer for interim relief made by the learned counsel for the plaintiff and while there is some substance in the plea that the security deposited may not be adjustable in advance towards rent, in view of the position of law laid down in judgments of this Court reported in : 59(1995)DLT515 and 103(2003) DLT 572, the interest of justice would require that a suitable arrangement be made to protect the interest of the plaintiff. Accordingly, the defendant is directed to deposit in this Court a bank guarantee for the rent for the period from 1st May, 2004 till 31st March, 2005 towards the rent of the premises. This deposit of a bank guarantee would adequately secure the rights of the plaintiff which may ensure to the benefit of the plaintiff at the time when the defendant No. 1 seeks to hand over possession of the premises to the plaintiff on 1st April, 2005 and no prejudice would be caused to it by the adjustment of the security deposit towards rent. At the date when the suit premises are being vacated by the defendant No. 1 a local commissioner will ascertain the physical condition of the suit premises. Accordingly, the application filed by the plaintiff is allowed to a limited extent that the defendant No. 1 Bank is directed to submit a bank guarantee as detailed above with this Court within three weeks from today to the satisfaction of the Registrar of this Court. </p><p style="text-align: justify;">11. The application stands disposed of accordingly.<p style="text-align: justify;"></p><p style="text-align: justify;">',
			'observations' => null,
			'overruledby' => null,
			'prhistory' => '',
			'pubs' => '114(2004)DLT310; 2004(77)DRJ266',
			'ratiodecidendi' => '',
			'respondent' => 'The Lakshmi Vilas Bank Ltd. and anr.',
			'sub' => 'Contract',
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$title_for_layout = 'Madan Lal Khanna and anr. Vs. the Lakshmi Vilas Bank Ltd. and anr. Semantic Analysis'
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		(int) 8 => 'the Lakshmi Vilas Bank Ltd.',
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	'Judgement' => array(
		'id' => '700838',
		'acts' => 'Specific Relief Act - Sections 14, 34 and 41; ;Delhi Rent Control Act',
		'appealno' => 'IA No. 4640/2004 in CS(OS) No. 795/2004',
		'appellant' => 'Madan Lal Khanna and anr.',
		'authreffered' => '',
		'casename' => 'Madan Lal Khanna and anr. Vs. the Lakshmi Vilas Bank Ltd. and anr.',
		'casenote' => 'Contract - unwilling lessee - Sections 14, 34 and 41 of Specific Relief Act and Delhi Rent Control Act - whether unwilling lessee can be directed by interlocutory Order to continue as lessee till expiry of time for which lease was executed - plaintiff cannot pray for interim Order for continuance of lease as lessee was unwilling to continue - proper remedy for plaintiff is to seek damages for violation of terms of lease.


 -  -  If the Lesser has mortgaged the land as well as the right to recover the rent, the lessee cannot make a surrender of his lease in favor of the Lesser, because it was not competent to the Lesser to accept the surrender without the concurrence of the mortgagee. The Confirming party specifically assured and covenants with the Second Party that in the event of failure or default on the part of the First Party to refund the advance received from the Second Party to the Second Party at the time of the Second Party delivery back vacant possession of the Schedule property, they will pay the same without any objection and until the advance is refunded in full the Second Party is entitled to continue in the Schedule premises as a sub lessee or otherwise without payment of any monthly rent or other sums to the First Party and will have right to exploit the Schedule property for their advantage and derive income there from until the moneys are refunded or recovered and in which event the First Party shall not withhold any amenities including electricity, water etc. (b) as per the provisions of Sections 14, 34 and 41 of the Specific Relief Act, the suit restraining the termination of the lease is not maintainable, particularly, when the lease of 1996 came to an end by efflux of time in 2005; the lease like any other contract can be determined and even if there is unjustified termination of lease, no cause of action can be made out for seeking relief under the Specific Relief Act. The First Party as well as Confirming Party have agreed to execute a fresh sub lease for a further period of 6 years on expiry of lease period of first 9 years in respect of the Scheduled premises measuring about 1800 Sq. 1 Bank had been paid back cannot be the basis for an interim order and can at best be a factor relevant for determining the eventual and final rights of the parties and the quantum of damages if any, found payable.',
		'caseanalysis' => null,
		'casesref' => 'Smt. Shanti Devi vs. Amol Kumar Banerjee;',
		'citingcases' => '
Smt. Shanti Devi v. Amol Kumar Banerjee		Discussed

; ... .... ...; ... .... .....',
		'counselplain' => ' A.M. Singhvi and; A.S.Chandhiok, Sr. Advs. and ; Rahul Sriv',
		'counseldef' => ' Kailash Vasdev, Sr. Adv. and ; S. Arvindh, Adv. for defendant No. 1 and ; ',
		'court' => 'Delhi',
		'court_type' => 'HC',
		'decidedon' => '2004-09-28',
		'deposition' => '',
		'favorof' => null,
		'findings' => null,
		'judge' => ' Mukul Mudgal, J.',
		'judgement' => '<p style="text-align: justify;">Mukul Mudgal, J. </p><p style="text-align: justify;">1. The primary question arising in this application and the suit is whether an unwilling lessee can be directed by an interlocutory order to continue as a lessee beyond November 2005 on the ground that the lease deed upon renewal provided starting in November 2005 that the lessee was continue up to a particular period i.e. November 2011 until the expiry of the renewal period of the lease. The lease with the 1st defendant was initially for 9 years commencing from 1996 and provided for a renewal for six years i.e. up to 2011. There is a further plea of the plaintiff that it took a loan of Rs. 1,71,50,000/-, which was payable to the defendant No.1 with interest by the defendant by adjusting lease rentals up to November 2011. The lease rentals up to November 2011 were sufficient to pay the entire amount loaned by the defendant No.1 to the plaintiff. The defendant No.1 at the request of the plaintiff agreed to pay the lease money directly to defendant No. 2 upon the entire amount loaned to the plaintiff by the defendant NO.1 being returned to the plaintiff: Thus in addition to the loan of Rs. 8 crores already advanced to the plaintiff the defendant No.1 at the behest of the plaintiff, the sum of Rs. 1.25 crores was refunded to the defendant No.1 bank by the defendant No.2. Thus defendant No.2 advanced a sum of Rs. 9.25 crores to the plaintiff as a loan by taking the suit property as mortgaged security. The contention of the plaintiff/Lesser thus is that a lease deed for a fixed period could not be limited or curtailed by the lessee. The plaintiff further submits that the respondent No.1's plea that the respondent No.1's security deposit with the plaintiff equal to one year's rent should be adjusted towards their stay till November 2005 is not sustainable as the security deposit is only refundable after vacation of premises and such security deposit can not be adjusted towards payment of lease rentals as per the law laid down in 59(1999) DLT 515 and 103 (2002)DLT 572. The plaintiffs prayer in this application is thus two fold:</p><p style="text-align: justify;">a) The defendant No.1 be directed by an interim order to continue to stay on as a lessee till November 2011 at the agreed rent;</p><p style="text-align: justify;">b) the defendant No.1 be further directed to continue paying the monthly rent and not seek its adjustment from the security deposit.</p><p style="text-align: justify;">The prayer in the suit seeks a declaration that the defendant No.1 was obliged to renew the lease in November 2005 to extend it till November 2011.</p><p style="text-align: justify;">2. The plaintiff has thus contended that defendant No.1 had all along taken the premises on lease for a period of 15 years as per their letter dated 23rd July 1996 by which two leases for 9 years and 6 years which led to an agreement to sub lease between defendant No.1 and the plaintiff for a period of 9 years and the agreement to sub lease dated 30th November 1996 and 5th February 1997 categorically mentioned that after the expiry of 9 years the period will further execute a lease of 6 years. Consequently the lease dated 27th April 2001 for a period of 6 years have been executed by defendant No.1. As per defendant No.1 own calculations the period of loan was based on lease rentals payable till November 2001 and the loan period was 39 quarters starting from 29th March 2001. The defendant No.1 had given a total loan of Rs.9.25 crores which included a sum of Rs.1.25 crores remitted by defendant No.2 to defendant No.1 as per the conditions imposed by defendant No.1 on 15th March 2003. In this respect reliance has been placed on a decision of the Supreme Court in Smt. Shanti Devi vs. Amol Kumar Banerjee reported as AIR 1981 SC 1550 wherein it has been held:</p><p style="text-align: justify;">'The parties could not by their pleadings alter the intrinsic character of the lease or bring about a change of the rights and obligations flowing there from. The lease was a lease for a definite term and, thereforee, expired by efflux of time by reason of S. 111(a) of the Transfer of Property Act.'</p><p style="text-align: justify;">3. Reliance has also been placed on the following passage of Transfer of Property Act by S.K. Ray:</p><p style="text-align: justify;">' If the Lesser has mortgaged the land as well as the right to recover the rent, the lessee cannot make a surrender of his lease in favor of the Lesser, because it was not competent to the Lesser to accept the surrender without the concurrence of the mortgagee. The right to agree to the surrender of the lease did not remain the Lesser-mortgagor but passed to the mortgagee, and without the latter's consent the surrender was not valid. Consequently the lessee remained liable to pay rent to the mortgagee'</p><p style="text-align: justify;">4. The learned counsel for the plaintiff has further placed reliance on a judgment of the Bombay High Court in Havu V. Ganpati reported as 32 Bom. L.R. 689 in support of the above plea.</p><p style="text-align: justify;">5. It is, thereforee, submitted by the plaintiff that the correspondence exchanged between defendants 1 and 2 and the plaintiff lead to a compulsory inference that the contract stood concluded between them and the plaintiff had acted on such representations made and altered their position to their detriment. Had the defendant No.1 not agreed to the above mentioned agreement, the entire loan of the plaintiff qua the defendant No.1 would not have been realized by defendant No.2 and the plaintiff would not have agreed to defendant No.1 paying the lease rental directly to defendant No.2. The obligation arising out of rent leads to compulsory estoppel enforceable in law, particularly, by person such as plaintiff who acted upon such a promise. Defendant No.1 has refiled from the contract when it suits it. At the time the premises was given on lease there was no understanding or commitment that the plaintiff will seek a loan and defendant No.1 will give such a loan and, thereforee, the lease cannot be linked with the loan at this stage. The plaintiff had been punished by defendants for pre paying the loan as evident from the defendant No.1's letter dated 27.4.2001. Consequently the plaintiffs are entitled to be lease rental until the subsistence of the agreement.</p><p style="text-align: justify;">6. The defendant No.1, bank, placed reliance on clauses 7 and 10 of the agreement to lease which read as under:</p><p style="text-align: justify;">'7. Pursuant to the above the Second Party has this day paid the first party a sum of Rs.12,48,00/- (Rupees twelve lakhs forty eight thousand only) being the 50 per cent of agreed deposit by cheque bearing No. 271 223 dated 07/09/1996 on the Lakshmi Vilas Bank Ltd., Karol Bagh, New Delhi and drawn in favor of the First Party by way of initial advance which sum the first party hereby admits and acknowledge the receipt of the same on the execution of this agreement and balance deposit payable as per the area available shall be paid on execution of the lease deed in terms of this agreement.</p><p style="text-align: justify;"> ... .... ...10.The members of the Confirming Party jointly and severally agree and bind themselves and stand as guarantors for the First Party in the matter of performance of the obligations casted upon the First Party and also in the matter of repayment of the advance amount, at the time of the Second Party delivering back vacant possession of the Schedule property or earlier and basing on the said guarantee of the Confirming Party the Second Party has agreed to pay the huge advance. The Confirming party specifically assured and covenants with the Second Party that in the event of failure or default on the part of the First Party to refund the advance received from the Second Party to the Second Party at the time of the Second Party delivery back vacant possession of the Schedule property, they will pay the same without any objection and until the advance is refunded in full the Second Party is entitled to continue in the Schedule premises as a sub lessee or otherwise without payment of any monthly rent or other sums to the First Party and will have right to exploit the Schedule property for their advantage and derive income there from until the moneys are refunded or recovered and in which event the First Party shall not withhold any amenities including electricity, water etc. The First Party agrees for the same and both the First Party and the confirming party jointly and severally agree and bind themselves to promptly repay the advance without interest at the time of receiving back vacant possession.' </p><p style="text-align: justify;">7. It is also contended by defendant No.1 that the advance rent available to the plaintiff for one year i.e. up to 31st March 2005 is for ground floor Rs.48,74,880/- and basement Rs.36,09,144/-. On 27th April 2004 the bank communicated its decision to terminate its leases with effect from 1st April 2005 when it wants to hand over the possession to the plaintiff-landlord. Consequently the adjustment of advance rent was also sought. The defendant No.1 has also contended that the suit filed by the plaintiff deserves to be dismissed (a) as the suit is not properly valued for the purposes of court fees; (b) as per the provisions of Sections 14, 34 and 41 of the Specific Relief Act, the suit restraining the termination of the lease is not maintainable, particularly, when the lease of 1996 came to an end by efflux of time in 2005; the lease like any other contract can be determined and even if there is unjustified termination of lease, no cause of action can be made out for seeking relief under the Specific Relief Act. The adjustment of advance rent towards the future payment cannot be equated with adjustment of security deposit as contemplated by the judgments of this court and relied upon by the plaintiffs. In any case the said judgments were under the Delhi Rent Control Act and the present proceedings are not covered by Delhi Rent Control Act. It is also contended that in so far as the arrangement of repayment of any loan taken and/or any other financial engagement between the plaintiff and defendant No.2 is concerned, the defendant No.1 is not a party to such an agreement and there is no privity of contract and such a contract or obligations arising there from cannot thus bind defendant No.1.</p><p style="text-align: justify;">The relevant clauses in the sub lease dated 20th November 1996 entered into between the plaintiff and defendant No.1 are as under:</p><p style="text-align: justify;">' 1) The first party hereby granted sub lease of the schedule property and the second party hereby accepts the sub lease of the property described in the Schedule herein for a period of nine years from the date of the commencement of the lease.</p><p style="text-align: justify;"> ... .... .....4) That in consideration of the First Party agreeing to grant sub lease of the Schedule Property in terms contained herein the Second Party has agreed to pay the First Party a sum of Rs. 24,96,000/- representing one years rent as advance which is repayable by the First Party to the Second Party without interest at the time of the Second Party delivering back vacant possession of the Schedule Property. That on the expiry of the first three years of lease the Second Party shall pay a sum equivalent to one year's enhanced portion of rent to the First Party and on the expiry of the sixth year from the date of commencement of lease the Second Party shall pay again one year's enhanced portion of rent of the First Party and the amounts paid as above to the First Party as deposit shall be refunded to the Second Party at the time of delivering back vacant possession of the Schedule premises without interest.' </p><p style="text-align: justify;">The agreement dated 30th November 1996 contained the renewal clause reading as under:</p><p style="text-align: justify;">'The First Party as well as Confirming Party have agreed to execute a fresh sub lease for a further period of 6 years on expiry of lease period of first 9 years in respect of the Scheduled premises measuring about 1800 Sq. Ft. of super built up area situated on the Ground at the rear portion at the rear opening on the service road in property bearing No. 74/8, Janpath, New Delhi as marked red in the site plan attached to this agreement on the same terms and conditions as mentioned in the said agreement dated 09/9/1996 except that the rent will be enhanced by 25% on the expiry of every three years. Rest of the terms and conditions of the fresh sub-lease to be executed after expiry of the sub-lease aforesaid shall remain the same and binding on the parties.'</p><p style="text-align: justify;">9. I am of the view that even if the averments of the plaintiff are accepted to be correct to the effect that the intrinsic character of the lease cannot be altered and a lease for a definite term executed on 27-4-2001 pursuant to the agreement dated 30th November, 1996 could only expire by efflux of time, the plaintiff could not pray for an interim order for continuance of the lease. The remedy for the plaintiff in such a situation is to seek damages for violation of its rights and it cannot seek an interim order directing the continuance of a relationship of Lesser and Lessee when the Lessee was unwilling to continue. The fact that there are transactions of loan between the parties and the loan taken by the plaintiff from the defendant No. 1 Bank had been paid back cannot be the basis for an interim order and can at best be a factor relevant for determining the eventual and final rights of the parties and the quantum of damages if any, found payable. In any case there is no tripartite contract between the parties signed by three parties and the plea that the inter se contracts and correspondence between the plaintiff and the defendant No. 1 and the plaintiff and the defendant No. 2, constituted such a tripartite agreement cannot be accepted at this stage. I am unable to accede to the prayer of the plaintiff that facts of the case indicated compulsory estoppel by the representation of the parties by virtue of which estoppel the rights of the plaintiff are enforceable at this interim stage.</p><p style="text-align: justify;">10. The defendant No. 1 Bank had averred that in respect of rent from the date indicated in the notice to quit and up to 31st March, 2005, it is prepared to secure the said amount by depositing the bank guarantee in this Court so that at the time of vacation of the premises if any dues are payable they can be adjusted upon an inspection of the premises. </p><p style="text-align: justify;">11. Since I am not inclined to agree with the prayer for interim relief made by the learned counsel for the plaintiff and while there is some substance in the plea that the security deposited may not be adjustable in advance towards rent, in view of the position of law laid down in judgments of this Court reported in : 59(1995)DLT515 and 103(2003) DLT 572, the interest of justice would require that a suitable arrangement be made to protect the interest of the plaintiff. Accordingly, the defendant is directed to deposit in this Court a bank guarantee for the rent for the period from 1st May, 2004 till 31st March, 2005 towards the rent of the premises. This deposit of a bank guarantee would adequately secure the rights of the plaintiff which may ensure to the benefit of the plaintiff at the time when the defendant No. 1 seeks to hand over possession of the premises to the plaintiff on 1st April, 2005 and no prejudice would be caused to it by the adjustment of the security deposit towards rent. At the date when the suit premises are being vacated by the defendant No. 1 a local commissioner will ascertain the physical condition of the suit premises. Accordingly, the application filed by the plaintiff is allowed to a limited extent that the defendant No. 1 Bank is directed to submit a bank guarantee as detailed above with this Court within three weeks from today to the satisfaction of the Registrar of this Court. </p><p style="text-align: justify;">11. The application stands disposed of accordingly.<p style="text-align: justify;"></p><p style="text-align: justify;">',
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LAW: the Specific Relief Act

PERSON: Mukul Mudgal, Shanti Devi, Amol Kumar Banerjee, S.K. Ray, Lesser, Lesser, Havu V. Ganpati, L.R., Rs.12,48,00/-, 07/09/1996, Karol Bagh, Schedule, Schedule, Schedule, Janpath, Lessee

DATE: November 2005, November 2005, November 2011, 9 years, 1996, six years, 2011, November 2011, November 2011, one year's, November 2005, November 2011, monthly, November 2005, November 2011.2, 15 years, 23rd July 1996, 9 years, 6 years, 9 years, 30th November 1996, February 1997, 9 years, 6 years, 27th April 2001, 6 years, November 2001, 39 quarters, 29th March 2001, 15th March 2003, 1550, this day, monthly, one year, up to 31st March 2005, 27th April 2004, 1st April 2005, 34, 1996, 2005, 20th November 1996, ' 1, a period of, nine years, one years, the first three years, one year's, the sixth year, one year's, November 1996, 6 years, first 9 years, every three years, 30th November, 1996, up to 31st March, 2005, 1st May, 2004, 31st March, 2005, 1st April, 2005, three weeks, today

ORDINAL: 1st, 5th, first, first, first, second, 30th

CARDINAL: 2, 8, 1.25, No.1, No.2, No.2, 9.25, 59(1999, 515, 103, 2002)DLT 572, two, two, No.2, 32, 689, 1, 2, No.2, No.1, No.2, 27.4.2001, 7, 10, twelve, 271 223, 10.The, 41, No.2, 4, 24,96,000/-, 27-4-2001, 1, three, 1, 2, 1, 11, 103(2003, 1, 1, 1, 11

PRODUCT: No.1, No.1, No.1, No.1, No.1, No.1, No.1, No.1, No.1, No.1, No.1, No.1, No.1, No.1, Schedule

ORG: the Supreme Court, AIR 1981, SC, the Transfer of Property Act, Reliance, Transfer of Property Act, the Bombay High Court, the Second Party, the Lakshmi Vilas Bank Ltd., the First Party, the Confirming Party, the First Party, the First Party, the Second Party, the Confirming Party, the Second Party, the Second Party, the First Party, the Second Party, the Second Party, the Second Party, Schedule, the First Party, First Party, The First Party, the First Party, Sections 14, the Delhi Rent Control Act, Delhi Rent Control Act, the First Party, the Schedule Property, the Second Party, the First Party, the First Party, the Second Party, the Second Party, Second Party, the First Party, Second Party, the First Party, the First Party, the Second Party, Schedule, under:'The First Party, Confirming Party, Lesser and Lessee, Court, Court, DLT 572, Court, Court, Court

GPE: Smt, New Delhi, New Delhi

MONEY: 50 per cent

PERCENT: 25%