Delhi High Court
Kidarsons Industries Private Ltd. vs Allahabad Bank on 26 April, 2007
Author: A.K. Sikri
Bench: A.K. Sikri, Aruna Suresh
JUDGMENT A.K. Sikri, J.
1. The appellant herein filed Suit No. 193/1996 in this Court. This suit was for specific performance of the purported agreement of lease of immovable property and for mandatory injunction. That suit has been dismissed by the learned single Judge vide judgment and decree dated 1.7.1999 holding that the suit filed by the appellant herein was not maintainable.
2. he appellant was inducted as tenant by the respondent Allahabad Bank on the 4th floor of building known as 'Allahabad Bank Building' situated at 17, Parliament Street, New Delhi. Area in its possession, on the said floor, was 1178 sq. ft. Monthly rent was Rs. 7/- per sq. ft. in addition to Rs. 5/- per sq. ft. per month payable as service charges. This tenancy was up to 1989. The appellant continued in possession even thereafter and in the year 1996 filed the afore-mentioned suit. The case of the appellant was that after the expiry of the earlier period of tenancy, the respondent agreed with the appellant to allow the appellant to continue as a tenant in the suit premises from 1.1.1994 at the rent and service charges which are increased by 25% over the last paid rent and service charges and as per the agreement the appellant was to continue as a tenant till 30.11.1998. However, the respondent sent legal notice dated 21.12.1995 terminating the tenancy of the appellant in respect of the suit premises. According to the appellant, this was not permissible in view of the agreement of lease/renewal of lease up to 30.11.1998 with the right of renewal granted to the appellant.
3. he respondent herein filed the written statement and contested the suit, inter alia, on the ground that there was no such agreement vide which the respondent agreed for renewal of the license. It was submitted that after the lease expired by efflux of time in the year 1989, there was no fresh lease deed entered into between the parties. It was stated that though negotiations took place between the parties regarding the lease of the suit premises, the same was never concluded in a valid contract. It was also stated that the lease, in these circumstances, which became monthly lease, was validly terminated vide notice dated 21.12.1995 and after the termination of the said lease, the appellant was in unauthorised occupation of the suit premises and was only a trespasser.
4. he learned single Judge, in view of the aforesaid pleadings, framed the following preliminary issue:
'Whether the suit is not maintainable in the present form' By the impugned judgment, this issue has been decided against the appellant and in favor of the respondent, as a result whereof the suit of the plaintiff has been dismissed.
5. efore we proceed further, some developments which have taken place during the pendency of this appeal need a mention. In this appeal, notice was issued on 4.8.2000 after taking note of the submission of learned Counsel for the appellant that the appellant was willing to increase the rent on reasonable terms. Thereafter, on 28.11.2002, status quo with regard to possession of the suit premises was directed to be maintained to explore the possibility of settlement, if any, but no settlement could be arrived at. The appellant had also produced resolution dated 30.5.2002 issued by the Ministry of Urban Development and Poverty Elevation (Directorate of Estates) laying down certain guidelines in respect of eviction of tenants from public premises under the control of public sector undertakings/financial institutions. The appellant was allowed to make representation in terms of the said guidelines, which representation was also rejected. Thereafter, the respondent initiated proceedings before the Estate Officer under the Public Premises Eviction of the Unauthorized Occupants Act, 1971 (hereinafter referred to as 'the Act') against the appellant. Order dated 17.11.2003 was passed clarifying that the pendency of the present appeal as well as the interim order passed in this appeal would not come in the way of the proceedings before the Estate Officer being concluded by appropriate orders. The Estate Officer proceeded with the matter and passed eviction orders. Against those eviction orders, the appellant has filed the appeal under Section 9 of the Act, which is pending before the learned Addl. District Judge. It may also be noted that as no stay of the order of the Estate Officer was granted by the learned Addl. District Judge in the said appeal, the respondent has even taken possession of the suit premises.
6. When the matter came up for hearing on 2.4.2007, Mr. Rajinder Nath, Director of the appellant company, appeared and stated that he would like to argue the case himself. Accordingly, we heard him as well as counsel for the respondent. The appellant also filed written submissions and in these written submissions, in fact, various orders passed by the Division Bench in this appeal from time to time are referred to. The relevant orders have already been taken note of above.
7. Learned Counsel for the respondent had submitted that in view of the aforesaid developments, this appeal had become infructuous. We are of the opinion that learned Counsel for the respondent is right in his submission. As already noted above, this Court had permitted the Estate Officer to go ahead with the proceedings under the Act, notwithstanding the pendency of this appeal or the interim order passed. The Estate Officer has passed the order against which the appeal is pending. The Court of learned Addl. District Judge, with whom the appeal is pending, is seized of the matter and would naturally examine the validity of the order passed by the Estate Officer.
8. Even on merits, we do not find any substance in this appeal. It is not in dispute that the lease deed, which was also unregistered, between the parties expired in the year 1989. Vide letter dated 29.4.1989, the respondent had agreed to renew the appellant's tenancy up to 30.11.1998 with the option for further renewal by mutual consent. However, no lease deed was ever executed, but at the same time, the appellant was allowed to continue in the tenanted premises. The learned single Judge, on the basis of the aforesaid facts, concluded that the letter dated 29.4.1989 did not give any right to the appellant to remain in possession. In the absence of any registered instrument, the lease would be deemed as from month to month, determinable by a statutory notice under Section 106 of the Transfer of Property Act, 1882. It was, therefore, validly terminated vide notice dated 21.12.1995. The suit was, accordingly, dismissed as not maintainable, which was even filed after the termination of the tenancy. The learned single Judge also held that the letter dated 29.4.1989, which was the foundation of the suit, provided further extension of lease only by mutual consent and in the absence of any mutual agreement, the appellant could not seek specific performance. Further, even as per the said letter, the lease was to be extended up to 30.11.1998, which period had already expired. We are of the opinion that the learned single Judge is right on all counts.
9. There was no registered lease deed ever executed between the parties in respect of the suit premises. Even the unregistered lease deed expired in the year 1989. On 29.4.1989, letter was given by the respondent to the appellant, inter alia, stating that : we agree/accept the existing lease agreement is extended at current rates (i.e. Rs. 7/- and Rs. 5/- per sq.ft.) of rent and service charges up to 31.12.1993 and after that rent and service charges will be applicable by an increase of 25% for the priod up to 30th November, 1998 and thereafter as may be mutually agreed.? However, even after this letter, there was no registered lease deed executed between the parties from 1989 till 21.12.1995 when the notice of termination was given or when the suit was filed in the year 1996. The appellant knew fully well that in the absence of any registered document, mere letter dated 29.4.1989 would not create any such interest in favor of the appellant in an immovable property as admittedly the rent is more than Rs. 100/- and the period is also more than 11 months. Still, the appellant did not bother to ensure that the lease deed is executed and registered.
10. Taking note of various judgments on this issue, the Division Bench of this Court in Aggarwal and Modi Enterprises (Cinema Project) Pvt. Ltd. and Anr. v. New Delhi Municipal Council reported as 2005 (123) DLT 154, culled out the following principles:
(a) In India, a lease may be in perpetuity and the law, either the Transfer of Property Act or the general law abhors a lease in perpetuity. If there is a covenant for renewal in the lease agreement, lessee can exercise his right unilaterally for extension of lease, for which consent of Lesser is not necessary.
(b) Where the principal lease executed between the parties containing a covenant for renewal, is renewed in accordance with the said covenant, whether the renewed lease shall also contain similar clause for renewal depends on the facts and circumstances of each case, regard being had to the intention of the parties as displayed in the original covenant for renewal and the surrounding circumstances.
(c) There is difference between an extension of lease in accordance with the covenant in that regard contained in the principal lease and renewal of lease. In the case of extension it is not necessary to have a fresh deed of lease executed. However, option for renewal consistently with the covenant for renewal has to be exercised consistently with the terms thereof and, if exercised, a fresh deed of lease shall have to be executed between the parties.
(d) Failing the execution of fresh deed of lease, another lease for a fixed terms shall not come into existence though the principal lease in spite of the expiry of the term thereof may continue by holding over for year by year or month by month, as the case may be.
(e) If the language in the lease deed is ambiguous, the court would opt for an interpretation negating the plea of the perpetual lease. Where there is a clause for renewal subject to the same terms and conditions, it would be construed as giving a right to renewal for the same period as the period of the original lease, but not a right to second or third renewal and so on unless, of course, the language is clear and unambiguous. While ascertaining the intention of the parties in this behalf, lease deed has to be read as a whole.
11. Even otherwise, the aforesaid letter also permitted the appellant to stay in the premises till 30.11.1998, which period expired during the pendency of the suit and before the judgment was pronounced by the learned single Judge. After 1998, lease could further be renewed only by mutual consent. The respondent has not given any consent nor agreed on any terms on which the lease is to be renewed. In the absence of such an agreement, in any case, the appellant had no right to stay in the premises after 30.11.1998. Therefore, the suit for specific performance was not maintainable even on this ground and had become infructuous on the date of passing the judgment and decree by the learned single Judge.
12. We, therefore, do not find any merit in this appeal, which is accordingly ismissed with costs.