Delhi District Court
Prithvi Consultants Pvt. Ltd vs Lic Housing Finance Ltd on 9 September, 2025
Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd.
IN THE COURT OF SH. JITEN MEHRA: DISTRICT
JUDGE-10: TIS HAZARI COURTS: DELHI.
CS DJ NO.611149/16
CNR NO.DLCT01-00045-2013
In the matter of:
1. PRITHVI CONSULTANTS PVT LTD.
A Company incorporated under the
Companies Act 1956, having its
registered office and corporate office at:
C-10, Community Centre,
Janak Puri, Delhi-110058.
2. GALLA INVESTMENTS CO. PVT. LTD.
A Company incorporated under the
Companies Act 1956, having its
registered office and corporate office at:
C-10, Community Centre,
Janak Puri, Delhi-110058.
3. Mr. GALLA HARSHVARDHAN
S/o Mr. G. Gundaiah
R/o A-5/2, Aditi Apartments,
D Block, Janak Puri, Delhi-110058.
......Plaintiffs
Versus
1. LIC HOUSING FINANCE LTD.
Lakshmi Insurance Building
Asaf Ali Road, New Delhi-110002.
2.LIC HOUSING FINANCE LTD.
A Company incorporated under the
Companies Act 1956, having its
office at:
Lakshmi Insurance Building
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Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd.
Asaf Ali Road,
New Delhi-110002. .....Defendants
Date of institution : 20.12.2013
Date on which reserved for judgment : 03.09.2025
Date of decision : 09.09.2025
SUIT FOR RECOVERY OF RS.7,28,143/- (RUPEES
SEVEN LAKHS TWENTY EIGHT THOUSAND ONE
HUNDRED AND FORTY THREE ONLY).
JUDGMENT
1. The present civil suit has been filed by the plaintiffs no.1-3 against the defendants no.1 and 2 seeking recovery of Rs.7,28,143/- along-with interest pendente lite and future interest @ 15% p.a, along with costs of the suit.
2. At this outset, I may add that the plaintiffs have impleaded 'LIC Housing Finance Ltd.' as the defendant no.1 as well as the defendant no.2. It is nowhere pleaded in the entire plaint as to how the two defendants are separate and distinct legal personalities in law from each other. Hence, LIC Housing Finance as defendant no.2 is hereby deleted from the array of parties, being one and the same company.
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Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. Plaintiff's version as per the plaint:
3. The plaintiffs no.1 and 2, who are private limited companies, and the plaintiff no.3 have authorised Sh. Manu Sharma, who is working as a Commercial Manager with the plaintiffs no.1-2 to sign, verify and institute the present suit.
4. The defendant no.1 is stated to be the main functionary of the defendant no.2, having its office at Lakshmi Insurance Building, Asaf Ali Road, New Delhi - 110002, and is a company registered under the Companies Act.
5. The plaintiffs no.1-3 are the owners of properties: (i) Flat no.402, ad-measuring 441 sq. feet; (ii) Flat no. 404, ad- measuring 408 sq. feet and (iii) Flat no.406, ad-measuring 354 sq. feet, hence totally ad-measuring 1203 sq. feet, all situated in the Commercial Building raised over Plot no.54, B Block, Community Centre, Janakpuri, New Delhi (hereinafter referred to as the 'suit property') . CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.3/69
Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd.
6. A registered joint lease deed dated 26.04.2005 was executed between the authorized representatives of the defendants and the plaintiffs, whereby the suit properties were leased out to the defendant for a period of nine years. The monthly rent for the period of three years, commencing from 01.08.2002 till 31.07.2005 was Rs.30/- per sq. ft., amounting to Rs.36,090/- per month. Thereafter, for the next period of three years commencing from 01.08.2005 till 31.07.2008, the monthly rent would be enhanced to Rs.36/- per sq. ft., amounting to Rs.43,308/- per month. Subsequently, for the final period of three years, commencing from 01.08.2008 till 31.07.2011, the rent would be again enhanced to Rs. 43.20/- per sq. ft. amounting to Rs. 51,969/- per month. The monthly rents payable by the defendant was in addition to the other charges towards electricity, water, maintenance, ground rent etc.
7. The defendant accordingly exercised its option to CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.4/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. extend the lease with respect to the suit property till 31.07.2011 as per the escalated rents mentioned earlier.
8. It was also agreed between the parties that in case the defendant wished to further renew/extend the tenure of the lease upon its expiry, the terms of the lease shall be re- negotiated between the parties. Failing which, the defendant was under an obligation to hand over the peaceful possession of the suit property back to the plaintiffs as per clause 4 of the lease deed. In case the possession was not handed back, the defendant no.1 was under an obligation to pay damages of Rs.3,000/- per day for the period of it's unauthorized occupation.
9. Much prior to the expiry of the lease period on 31.07.2011, the plaintiffs sent a letter dated 09.02.2011 to the defendants to either enter into a fresh lease deed at an enhanced concessional rate of Rs. 95 per sq. feet (although the market rent was Rs. 125/- per sq. feet) or to vacate the suit property. Even after the expiry of the term of the lease CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.5/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. period on 31.07.2011, the plaintiffs sent letters dated 03.08.2011, 01.11.2011 and 13.06.2012 to the defendants to either enter into a fresh lease deed or vacate the suit property.
10. However, the defendants continued to occupy the suit property and communicated to the plaintiffs to atleast accept the cheques towards occupation of the suit property for the period after 31.07.2011, with the understanding that the difference of the rate of rent could be settled upon them getting the approval for the same.
11. The plaintiffs communicated to the defendants that they were accepting the rent amount from the defendants under protest vide letter dated 25.02.2012.
12. Thereafter, the defendant sent an e-mail dated 17.07.2012, communicating it's intention to vacate the suit property within two months. However it failed to vacate the suit property, even after communication dated 02.08.2012 CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.6/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. sent by the plaintiffs. The defendants then sent e-mail dated 13.09.2012 requesting for a further period of two months. The suit property was finally vacated by the defendants on 12.11.2012.
13. The plaintiffs thus claim that as per their letter dated 04.02.2013, they are entitled to invoke clause no.4 of the lease deed dated 26.04.2005 and seek damages @ Rs.3,000/- per day from the defendants for the period 01.08.2011 till 12.11.2012 amounting to Rs. 14,04,000/-, subject to deduction of Rs. 7,79,535/-, being the rent amount paid by the defendants (after TDS deduction) totally amounting to Rs. 6,24,465/- along with interest @ 15% p.a.
14. Hence, the present suit for recovery of Rs.7,28.143/- along with interest pendente lite and future interest @ 15% p.a, along with costs of the suit.
Defendants' version as per the Written Statement
15. The defendants no.1 and 2 filed their combined CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.7/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. written statement in which it was admitted that they had entered into a registered lease deed dated 26.04.2005 with the plaintiff with respect to the suit property, which was extended as per clause 3 upto 31.07.2011.
16. As per clause 4 of the lease deed, it was agreed between the parties that after the expiry of nine years, the lease would be re-negotiated and the defendant was occupying the suit property with the consent of the plaintiffs and never agreed to pay the damages under the said clause.
17. It was further submitted that in the year 2011, the area manager of the defendant had informed the plaintiff of the expiry of the lease deed and to re-negotiate the same for its extension. The plaintiff assured the defendant that there would only be a reasonable escalation in the rent, believing which, the defendants continued to occupy the suit property and hence, there was no unauthorized occupation by the defendants.
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18. It is submitted that the defendants have vacated the suit property on 12.11.2012, after getting the due acknowledgment of the handover of the possession as well from the authorized personnel of the plaintiffs. Further, the defendants also settled the plaintiffs' dues by paying increased rent @ 25% on the existing rent also. Hence, there was no occasion to negotiate the same and the increased rent was also received by the plaintiffs in compliance of the oral settlement between the representatives of the parties. Therefore, there was no question of any outstanding amount being payable to the plaintiffs, rather the defendants had suffered a loss of around Rs. 14 lakhs due to the shifting of their office and furnishing the new premises. The defendants claim that rather an amount of Rs. 17,763/- has remained outstanding on the part of the plaintiffs, which has not been paid by them despite requests and the present suit had been filed to avoid the said liability. The present suit was also stated to have been filed by an unauthorized person on behalf of the plaintiffs.
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Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd.
19. It is submitted that in July, 2011 the plaintiffs had specifically agreed for the increased rent @ 25%, but got greedy and started to demand further increase of rent from the officials of the defendants. It was submitted that the legal notice of the plaintiffs dated 04.02.2013 was also based on a false and concocted calculation.
20. In the reply on merits, the defendants stated that before the expiry of the lease period, the officials of the plaintiff and defendant had entered into an agreement for increment of rent @ 25% on the last paid rent, which was paid by the defendants and accepted by the plaintiffs, as per their negotiations. It was denied that the defendants occupied the suit property from 01.08.2011 till 12.11.2012 with the consent of the plaintiffs and clause no.4 of the lease deed had no application.
21. It is further submitted that the defendant never accepted the revised rent @ Rs. 95/- per sq. feet and was wiling to a mutually negotiated increase of the rent, which CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.10/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. was settled at an increase of @ Rs. 25/- per sq. feet only.
22. The defendants denied any liability towards the plaintiffs and sought for the dismissal of the present suit with heavy cost.
Replication by the Plaintiff
23. In the replication filed by the plaintiff to the written statement of the defendant, the averments of the plaint were reiterated and the allegations in the written statement of the defendants were denied.
Issues framed:
24. That vide order dated 11.04.2016, the following issues were framed in the suit:
1. Whether the plaintiff is entitled to get a decree of recovery for a sum of Rs. 7,28,143/- against the defendant, as prayed for? OPP
2. Whether the plaintiff is entitled for the interest on the aforesaid amount alongwith pendentelite and future interest, if so, at what rate? OPP
3. Whether the suit has not been verified and filed by CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.11/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd.
the authorized person? OPD
4. Whether there is no cause of action against the defendants? OPD
5. Relief Evidence adduced by the Plaintiff
25. The plaintiffs examined two witnesses in support of their case.
26. Sh. Manu Sharma, Commercial Manager of the plaintiffs no.1 and 2 was examined as PW-1 and he tendered his evidence by way of affidavit (Ex. PW-1/A) on 05.10.2016 in which the contents of the plaint were reiterated.
27. He relied upon the following documents in support of his testimony:
a. Certificate of Incorporation and Memorandum of Association as Ex. PW-1/1 and Ex. PW-1/2. b. Certified extract of resolutions as Ex.PW-1/3 and 1/4 respectively.
c. The special power of attorney executed by Shri Gundiah Gaila in his favour as Ex PW 1/5.CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.12/69
Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd.
d. Original lease deed as Ex PW 1/6.
e. Notice along with the original postal receipt and affidavit as Ex PW 1/7 to 1/9, respectively. f. The defendant no.1 having failed to produce the above-refered original letters duly signed and signed by him as per the endorsement on the office copies as Ex. PW- 1/10 to 1/14.
g. Original postal receipt in respect of the letter dated 13.06.2012 as Ex PW 1/15.
h. Original letters dated 09.08.2011 and 08.12.2011, as received from defendant no. 1 as Ex PW 1/16 and 1/17, respectively.
i. Office copy of communication dated 02.08.2012 as Ex PW 1/18 -Print out of emails from defendant no. 1 dated 17.07.2012 and 13.09.2012 as Ex PW 1/19 and 1/20, respectively.
j. Copy of letter dated 17.11.2012 from defendant no. 1 as Ex PW 1/21.
k. Office copy of letter dated 27.11.2012 duly signed and sent by him as Ex PW 1/22 and original courier receipt in respect thereof as Ex PW 1/23.
l. Office copy in respect of the said letter as Ex PW 1/24 and original courier receipt in respect thereof as Ex PW 1/25, m. Office copy of the said notice as EX PW 1/26. Original postal receipts in respect of the said notice with acknowledgement due, under speed post and CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.13/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. through courier, original acknowledgment card duly received back, and printout in respect of delivery of speed post as Ex PW 1/27 to 1/34 respectively. n. Certificates of verification as Ex PW 1/35 to 39 respectively.
28. In his cross-examination dated 28.02.2019, PW-1 stated that the authorization letter was issued to him by Mr. Gundaiah on behalf of the plaintiff companies. He denied the suggestion that the authorization letter Ex. PW-1/3 and Ex. PW-1/4 were not issued by competent persons of the companies. He stated that he had not received any closure report with respect to his complaint/NCR, Ex. PW-1/40. He denied the suggestion that he had intentionally misplaced the minute books of the plaintiff companies. He admitted that the authorization Ex. PW-1/3 and Ex. PW-1/4 did not specifically mention anything with respect to filing of a case against the defendant company and volunteered to state that it was general in nature and authorized him to file any suit for recovery on behalf of the plaintiff companies. He admitted that as per the terms of the lease, the plaintiffs had received the complete rent for the suit property till CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.14/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. 31.07.2011. He also admitted that some negotiation of increase in rent and renewal of the lease period had started with the defendant. He also admitted that the terms of the increment, i.e. the percentage by which rent was to be increased was not settled and volunteered to state that the plaintiffs had communicated to the defendants about the prevalent market rent, to which the defendant assured that they would revert back on the same after seeking approval from their higher authorities, but no revert was done by them. He also admitted that the plaintiffs had continued to take rent from the defendant on the basis of the previous rent after July, 2011 and volunteered to state that it was received only on the assurance that the revised rent would be given after the approval from the competent authorities of the defendants. He pointed to Ex. PW-1/13 as one such written document in which the plaintiffs had stated that the rent was being received by them under protest.
29. He further deposed that the plaintiffs had given an intimation to the defendants to vacate the suit property in CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.15/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. advance before July, 2011. He denied the suggestion that no such intimation for vacation was served on the defendants and that the rent on the old rates was accepted by the plaintiffs.
30. He admitted that the plaintiffs had taken a loan facility from the defendant and also admitted that on or before 12.11.2012, the plaintiffs had not given any communication in respect of clause no.4 of the lease deed Ex. PW-1/6 to the defendant. He volunteered to state that several communication were sent to the defendants in this regards thereafter, including Ex. PW-1/25 and Ex. PW-1/26.
31. He further stated that it was correct that the letters dated 09.02.2011, 03.08.2011, 09.08.2011 and 01.011.2011 were only the terms of offer of renewal of the lease. He also stated that it was correct that both the plaintiffs and the defendants were interested in renewal of the lease for a further period, and volunteered to state that the renewal had to be at the new market rental.
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32. He denied the suggestion that the occupation of the defendant of the suit premises after 31.07.2011 was not unauthorized and stated that it was correct that there was no further lease deed executed and registered between the parties.
33. He denied the suggestion that the fresh terms and conditions were orally agreed to between the parties, or that they were accepted by the plaintiff as the plaintiffs continued to receive rent even after July, 2011. He volunteered to state that the plaintiffs' had not accepted the rent after July, 2011 till December, 2011 under protest, and it was only on the assurance of the defendants with respect to increase of the rent, that the plaintiffs tentatively started accepting the rent from the defendants, subject to its finalization.
34. He further stated that it was correct that the plaintiffs had received letter Ex. PW-1/21 and denied the suggestion CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.17/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. that the plaintiffs accepted the payments made by the defendant vide the said letter as full and final settlement of the rent due. He also admitted that the plaintiffs had not made any protest in respect of the arrears of rent at the time when the possession of the rented property was handed over by the defendant vide hand over of possession letter, which was exhibited as Ex. PW-1/D1. He denied the suggestion that after the payment vide Ex. PW-1/21, nothing remained to be paid by the defendants to the plaintiffs. He admitted that the plaintiffs were filing their respective income tax returns, which had not been placed on record. He further deposed that he had to check whether or not the plaintiffs had reflected the arrears of rent in their respective income tax returns and could bring the same if required.
35. He further stated that the books of accounts of the plaintiff companies were audited as per law. He stated that he could not answer as to whether the document Ex. PW-1/36 and Ex. PW-1/38 form part of the income tax return of the plaintiff companies and volunteered to state CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.18/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. that it may be known to the officials dealing with their accounts. He stated that Ex. PW-1/37 and Ex.PW-1/39 were in respect of Ex. PW-1/36 and Ex.PW-1/38 only. He denied the suggestion that a sum of Rs.17,763/- was payable to the defendants. Thereafter, the cross-examination of PW-1 was deferred.
36. PW-1 was further cross-examined on 03.06.2019, during which he stated that on 12.11.2012 when the keys of the suit property were handed over by the defendant, there was no question of raising any objection at that point in time since prior to that a notice had been given to the defendant, to which they had conveyed that it was under consideration and would pay the rate proposed from the side of the plaintiff. He denied that suggestion that after 31.07.2011, there was no understanding/agreement between the plaintiff and the defendant for making any payment of any damages/mesne profits after 31.07.2011, and on the contrary it was agreed that the tenancy would continue on the same rent as before. He also denied the suggestion that the CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.19/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. defendant vacated the premises as the plaintiff was asking for an exorbitant enhancement of rent and stated that the rent sought was much lower than the market rent. He stated that there was no material placed on record to show the rate of rent prevalent at that point in time as it was not required for filing of the suit.
37. He further stated that the plaintiffs could also place on record their income tax returns, but he had no personal knowledge whether they had reflected the arrears of rent from the defendant.
38. He further stated that the certificate filed under section 65B of the Indian Evidence Act was Ex. PW-1/40 and the same could not be filed earlier due to a mistake. He stated that he was working as a Project Co-ordinator of the plaintiff company and the entire office was under him. He stated that the data was transferred on a external hard disk, which was sent to the head office every month. He stated that the printout of the statement of account is from the CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.20/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. computer system and not from the external hard disk. He stated that the Accounts Manager operated the system on a day to day basis and denied the suggestion that he did not have complete control over the computer system and volunteered to state that the office keys were with him. He stated that he did not know as to who started and shit down the computer systems everyday. He stated that the plaintiffs used 'Tally' software and did not remember in which format the same had been submitted to the Court. He stated that the back up was taken on a daily basis on an external hard disk and after a month, the said hard disk used to be sent to the head office. He stated that the head office did not have control over the computer system. He stated that the certificate filed by him was in respect of three e-mails exchanged between the plaintiff and the defendant. He denied the suggestion that he did not have any control over the computer system and he had filed a fake certificate. Thereafter, PW-1 was discharged as a witness.
39. The plaintiffs next examined Sh. N.K. Singh, CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.21/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. Accounts Officer of the plaintiffs no.1 and 2 as PW-2, who tendered his evidence by way of affidavit Ex. PW-2/A on 05.10.2016, in which he stated that he was looking after the accounts, ledger and other books of the plaintiffs no.1 and 2. He stated that the defendants were liable to pay the sum of Rs. 6,24,465/- alongwith interest @ 15% p.a. with effect from 12.11.2012, till the institution of the suit i.e. 20.12.2013, amounting to Rs.1,03,678/-, totally amounting to Rs.7,28,143/-, which was due from the defendants.
40. PW-2 was cross-examined on 11.03.2019, during which he stated that he was a graduate in commerce from Patna University and had been working with the plaintiff company as an Accountant since the year 1992 and the accounts of the plaintiff company were being maintained on 'Tally' accounting software and a separate ledger was maintained for each client. He stated that the accounts were maintained on the basis of information supplied by PW-1 Sh. Manu Sharma. He stated that besides him, there were two other employees working and PW-1 was in charge of CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.22/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. the computer systems of the accounts branch. He stated that prior to taking the print out of any statement, it was always verified, and that he was managing the accounts of the defendant. He stated that the signatures at point X on Ex. PW-1/36 belonged to PW-1. He stated that he had verified the account statement of the defendant before giving it to PW-1 and denied that the ledger account of the defendant company was not properly maintained. Thereafter, PW-2 was discharged as a witness and the plaintiffs also closed their evidence on 03.06.2019.
Evidence adduced by the Defendants
41. The defendant examined its authorized representative Sh. Naveen Kumar Sinha, as DW-1, who tendered his evidence by way of affidavit as Ex. DW-1/1 on 27.09.2019, in which he reiterated the contents of the written statement. He only relied on the letter of authority as Ex. DW-1/A.
42. During his cross-examination dated 30.11.2021, DW-1 deposed that he had joined the defendant company in CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.23/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. the year 2003 as JEA and joined the Asif Ali Road Branch of the defendant company in the year 2017. He stated that he could not remember the details of the record which he claimed to have seen before swearing the present affidavit and and volunteered to state that he had seen it once. He stated that he did not see the lease deed dated 26.04.2005, however was aware that a lease deed dated 26.04.2005 had been executed between the parties and volunteered to state that it was for the period w.e.f the year 2002 till July- August, 2005. He stated that it was correct that the said lease deed was to be operational for a period of nine years commencing from the year 2002, after which it was to be re- negotiated between the parties for any subsequent period. He also stated that it was correct that the period of nine years was to conclude on 31.07.2011. He further stated that it was correct that in case of failure of the parties to re- negotiate the terms and conditions after 31.07.2011, the defendant would have been liable to vacate the suit property, upon advance notice from the plaintiff. He stated that he could not say whether the defendant was liable to pay CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.24/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. damages as per clause 4 of the sale deed and further on reading the clause, admitted that the defendant was liable to pay damages at the rate of Rs. 3,000/- per day in case of failure to vacate the suit property after 31.07.2011. He further volunteered to state that it was payable only on the demand by the plaintiff. He stated that he had brought no document on record to show that the occupation of the suit property by the defendant after 31.07.2011 was with the consent of the plaintiff and volunteered to state that the consent was oral, but could not state who had given the said consent on the part of the plaintiff. Thereafter, the further cross-examination of the witness was deferred.
43. DW-1 was next cross-examined on 21.09.2022, during which, he deposed that he had brought the authority executed in his favour to depose in the present case, the authority letter dated 20.11.2018 was exhibited then as Ex. DWI/P1. He stated that he did not have any other document to show his authority to depose in the present matter on behalf of the defendant. In reply to the question put to him CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.25/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. the letter of authority Ex. DWI/P1 did not contain any authority, authorizing him to depose in evidence on behalf of the defendant, he stated that it was a matter of record. He admitted that the document Ex. DW1/P1 was not executed in his presence; that the document Ex. PW1/6 was the lease deed executed between the plaintiff and the defendant in respect to the suit property and that the clause 4 of above referred lease Ex. PW1/6 stipulated an agreement between the plaintiff and the defendant for payment of the damages in case of contravention of any of the covenants of the lease deed and voluntarily deposed that the deposition made by him in his affidavit in this regard was correct and that he had neither brought, nor produced on the judicial record any document to show that the area manager of the defendant had approached the plaintiff for renegotiation of terms of extension of lease, in the year 2011. He further deposed that he had neither brought, nor produced on the judicial record any document to show that defendant had duly communicated about its limitation for increase of the rent, to the plaintiff; that he had neither brought, nor produced on CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.26/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. the judicial record any document to show that the plaintiff had ever agreed to the purported limitation of the defendant for increase of the rent and that he had neither brought, nor produced on the judicial record any document to show that the plaintiff had accepted the rent paid by the defendant towards full and final payment of rent, after expiry of initial period of lease. He further deposed that it was a matter of record that the plaintiff had, vide Ex.PW-1/11, required the defendant for renewal of the lease on enhancement of the concessional rate of rent to Rs.95/- per square feet, in respect of the property in question, against the then prevalent market rate of Rs.125/- per square feet and that it was a matter of record that document Ex.PW-1/11 to Ex.PW-1/14 were received by the defendant. He further admitted that the defendant continued to occupy the premises in question, for a period of around one year after the expiry of initial period (nine years) of the lease; that the defendants vide letter Ex.PW-1/17 had requested the plaintiff to accept the cheques towards rent at old rate and that the difference in rates, asked for by the plaintiff, could CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.27/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. be settled upon approval; that the cheques given by the defendant towards the rent of the premises in question at the old rate were received by the plaintiff under protest and subject to the remaining payment due, upon calculation at the rate of Rs.95/- per square feet; that the plaintiff had required the defendant to vacate the property in question vide letter Ex.PW-1/18, upon failure of the defendant to pay the rent at the rate of Rs.95/- per square feet; that the defendant had, for the first time, vide its letter Ex.PW-1/21, communicated and took stand to enhance the earlier rate of rent, by increase of 25% only from the earlier agreed rent unilaterally and further that the plaintiff raised a demand for the difference of amount of rent, calculated at the rate of Rs.95/- per square feet, vide its letter Ex.PW-1/22. DW-1 went on to admit that the said letter was duly received by the defendant; that the defendant failed to pay the remaining amount of rent, calculated at the rate of Rs.95/- per square feet and that the plaintiff vide its letter dated 04.02.2013, while invoking clause-IV of the lease deed, required the defendant to pay damages for its unauthorized occupation, CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.28/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. for the period after expiry of the lease, at the rate of Rs.3,000/- per day, which letter was duly received by the defendant. He deposed that he did not have any information as to whether or not the defendant paid damages to the plaintiff at the rate of Rs.3,000/- per day for the period of its unauthorized occupation of the property in question and that he had neither brought, nor can produce any document to show payment of any damages by the defendant to the plaintiff for the period of its unauthorized occupation of the property in question. He deposed that he could neither produce, nor have brought even today any document to show that there was ever any oral agreement in any respect between the plaintiff and the defendant in respect of the property in question and admitted that the defendant despite due service of notice Ex.PW-1/26 failed to comply or to reply. He deposed that he could neither produce, nor have brought even today any document to show any agreement between the plaintiff and the defendant that the plaintiff was under any obligation to bear any expenses, purportedly incurred by the defendant upon shifting to new premises. He CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.29/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. denied the suggestion that plaintiff was not liable to pay Rs.17,763/- to the defendant and that he could not depose the basis on which he claimsed that the plaintiff was liable to pay Rs. 17,763/- to the defendant. He deposed further that he had neither produced on record, nor brought even today any document to show that the prevalent rate of rent in the area in respect of similar properties, was less than Rs.95/- per square feet and that he could not comment upon the statement that the premises in question, was let out by the plaintiff to another tenant @ Rs.130/- per square feet, immediately upon vacation thereof by the defendant.
44. Thereafter, the witness DW-1 was discharged and the defendant also closed its evidence on 21.09.2022. Arguments of the parties
45. The Ld. counsels for the plaintiff Sh. Nitin Nayyar along-with Sh.Manoj Shete have argued that the plaintiffs have duly proved its case against the defendant firm and the CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.30/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. suit be decreed as prayed for. He has submitted that the lease period as per the lease deed Ex. PW-1/6 was for nine years and stood expired on 31.07.2011. He stated that vide the letter dated 09.02.2011 Ex. PW-1/10, the plaintiffs had communicated well in time that the rent from 01.08.2011 onwards was to be escalated to Rs. 95/- per sq. ft. The defendants have however always sought time to enter into a fresh lease deed and never disputed the same. He pointed to the letter dated 09.08.2011, Ex. PW-1/16 and letter dated 08.12.2011, Ex. PW-1/17 in this regards. He stated that the ultimately, as the defendants did not confirm the offer of the escalated rent from the plaintiffs for an unduly long time, the plaintiffs were constrained to issue the notice dated 13.06.2012, Ex. PW-1/14 to vacate the suit property and the defendants finally vacated the same on 12.11.2012. He argued that the clause no.4 duly applied between the parties, which provided for liquidated damages of Rs. 3,000/- per day. Hence, he argued that the suit of the plaintiffs be decreed as prayed for.
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Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd.
46. On the other hand, Ld. Counsels for the defendant Sh.Karnail Singh along-with Sh. Jatin Chaudhary has submitted that the defendant has been paying the rent to the plaintiffs as per the lease deed dated 26.04.2005, Ex. PW-1/6. The period of the lease admittedly expired on 31.07.2011 and prior to its expiry, the plaintiff started communicating with the defendant for the execution of a fresh lease deed and the defendant also duly informed the plaintiff, through its Delhi office, that since the approval of renewal of the lease was to be taken from their head office in Mumbai, hence, additional time would be required. Meanwhile, it was proposed that both the parties would sit down together and negotiate the new quantum of rent as per the prevalent market rent and till such time, it was agreed between the parties that the defendant shall continue to pay the existing rent, which was also accepted by the plaintiffs without any objection or reservation. He has further submitted that even though the renewal of the lease deed was pending approval before the Head Office of the defendant, there was never any commitment on the part of CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.32/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. the defendant to the agree to the rent as suggested by the plaintiff and there was no agreement in writing as well on this account.
47. He has further argued that the various letters, as mentioned in para no.9 of the evidence by way of affidavit of PW-1, have been sent by the plaintiffs in order to create pressure upon the defendant to get the rent increased as per their own whims and fancies. Further, the plaintiff's officials used to tell the defendant that the written communication was only a formality and the rate of increase of rent could be settled.
48. He has further argued that after the expiry of the term of the lease on 31.07.2011, till the vacation of the property by the defendant on 12.11.2012, the defendants have paid an escalated rent and a sum of Rs. 17,763/- was still due from the plaintiffs to the defendant, which has not been paid till date. This fact stands established from the evidence of PW-1 and the Ex. PW-1/21 i.e. email dated 17.11.2012. CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.33/69
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49. Further, it is submitted that the plaintiff was initially seeking an escalation of the rent @ Rs. 95/- per sq. feet, however, the present suit has been filed on the basis of clause no.4 of the lease deed dated 26.04.2005 (Ex. PW-1/6), however in the entire communication of the plaintiffs with the defendant the said clause no.4 has never been invoked. Further, as per Ex. PW-1/10, Ex. PW-1/ii, Ex. PW-1/12, Ex. PW-1/13, Ex. PW-1/14 and Ex. PW-1/16 the plaintiff has unilaterally informed the defendant that the rent would be escalated to Rs. 95-100 per sq. feet. However, the plaintiff has not examined any witnesses or even led any documentary evidence to prove the same.
50. Further, in July, 2011 the defendants had clearly informed the plaintiffs that they were agreeable to an escalation of 25% over the last paid rent and the defendant has also paid the same . Further, no protest was lodged when the property was also handed back by the defendants to the plaintiffs. Further, both the witnesses PW-1 and PW-2 have CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.34/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. been unable to establish the basis of invoking clause no.4 in the present suit.
51. I have heard the arguments advanced by the ld. Counsels for the parties and perused the record. Issue wise findings and reasons:
Issue no.3
52. I shall first decide issue no.3, which is reproduced below for the sake of convenience:
3. Whether the suit has not been verified and filed by the authorized person? OPD
53. The plaintiffs no.1-3 have instituted the present suit through Sh. Manu Sharma, who has been authorized vide board resolutions dated 13.03.2013 as well as a Special Power of Attorney from the plaintiff no.3.
54. Sh. Manu Sharma also stepped into the witness box as PW-1 and has relied upon the certified extract of the board resolutions of the plaintiffs no.1 and 2 as Ex. PW-1/3 and Ex. PW-1/4. Further, the special power of attorney executed CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.35/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. by the plaintiff no.3 has been relied upon as Ex. PW-1/5.
55. The evidence by way of affidavit of PW-1 was attested on 07.08.2014 and filed in the Court on 07.08.2014, in para no.2 of which, PW-1 deposed that he had the original minute books of the plaintiffs no.1 and 2. However, at the time of tendering of the evidence by way of affidavit Ex.PW-1/A on 05.10.2016, he stated that the original minute books of the plaintiffs no.1 and 2 were misplaced by him on 03.10.2016 at the time when he was visiting his lawyer at Tis Hazari Courts. He also relied on a copy of the non- cognizable report dated 03.10.2016 filed by him in this respect with the police as Ex. PW-1/40.
56. The Hon'ble Apex Court has held in United Bank of India vs. Naresh Kumar & Ors. MANU/SC/0002/1997 :
AIR 1997 SC 3 that mere technicalities ought not to defeat and which is that suits which are filed by companies should not be dismissed on technical grounds, once those suits are contested to the hilt, i.e. right till the end. It has been held as CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.36/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd.
follows:
"10. It cannot be disputed that a company like the appellant can sue and be sued in its own name. Under Order 6 Rule 14 of the Code of Civil Procedure a pleading is required to be signed by the party and its pleader, if any. As a company is a juristic entity it is obvious that some person has to sign the pleadings on behalf of the company. Order 29 Rule 1 of the Code of Civil Procedure, therefore, provides that in a suit by or against a corporation the Secretary or any Director or other Principal Officer of the corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. Reading Order 6 Rule 14 together with Order 29 Rule 1 of the Code of Civil Procedure it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. In addition thereto and dehors Order 29 Rule 1 of the Code of Civil Procedure, as a company is a juristic entity, it can duly authorise any person to sign the plaint or the written statement on its behalf and this would be regarded as sufficient compliance with the provisions of Order 6 Rule 14 of the Code of Civil Procedure. A person may be expressly authorised to sign the pleadings on behalf of the company, for example by the Board of Directors passing a resolution to that effect or by a power of attorney being executed in favour of any individual. In absence thereof and in cases where pleadings have been signed by one of its officers a corporation can ratify the said action of its officer in signing the pleadings. Such ratification can be express or implied. The court can, on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial, come to the conclusion that the corporation had ratified the act of signing of the pleading by its officer.
9. In cases like the present where suits are instituted or defended on behalf of a public corporation, public interest should not be permitted to be defeated on a mere technicality. Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the courts, under the Code of Civil Procedure, to ensure that injustice is not CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.37/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd.
done to any party who has a just case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable.
11. The courts below could have held that Shri L.K. Rohatgi must have been empowered to sign the plaint on behalf of the appellant. In the alternative it would have been legitimate to hold that the manner in which the suit was conducted showed that the appellant-Bank must have ratified the action of Shri L.K. Rohatgi in signing the plaint. If, for any reason whatsoever, the courts below were still unable to come to this conclusion, then either of the appellate courts ought to have exercised their jurisdiction under Order 41 Rule 27(1)(b) of the Code of Civil Procedure and should have directed a proper power of attorney to be produced or they could have ordered Shri L.K. Rohatgi or any other competent person to be examined as a witness in order to prove ratification or the authority of Shri L.K. Rohatgi to sign the plaint. Such a power should be exercised by a court in order to ensure that injustice is not done by rejection of a genuine claim."
(Emphasis supplied.)
57. The Hon'ble High Court of Delhi has held in the decision of M/s AMCO Vinyl Ltd vs M/s Classic Industries , 2012 SCC OnLine Del 3086 : (2012) 190 DLT 353 as follows:
"7. In my opinion, the trial Court has fallen into an error in holding that the suit has not been properly filed allegedly because the resolution Ex. PW1/2 & Ex. PW1/3 (being the extract and complete resolution respectively) does not mention with regard to signing and verification of the plaint. When we look at the resolution dated 29.1.2001 (wrongly mentioned dated 29.1.2002), it is seen that Mr. Anchal Bhargava has been authorized to appoint a lawyer and sign all the documents on behalf of the company including making any statement in the Court. In my opinion, this is sufficient authorization and it cannot be said that the suit has not been validly instituted and filed because signing of documents will include signing of CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.38/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd.
pleadings and thus filing of the suit. In fact, the Supreme Court has in the judgment reported as United Bank of India v. Naresh Kumar, 1996 (6) SCC 660 : AIR 1997 SC 3 held that the suits filed by companies should not be dismissed on technical grounds once they are pursued to the hilt. I therefore set aside the findings of the trial Court with respect to issue No. 1 and hold that the suit has been validly instituted and filed."
(Emphasis supplied.)
58. In the present case, admittedly the suit has been prosecuted to the proverbial 'hilt'. A perusal of Ex. PW-1/3 and Ex. PW-1/4 reveals that they are certified copies of the resolution passed by the meeting of the board of directors dated 13.03.2013 of the plaintiffs no.1 and 2 authorizing Sh. Manu Sharma to institute any prosecute any suit and also to verify any pleadings. The witness Ex. PW-1/1 has sufficiently explained the non-production of the minute books of the companies by giving the reason that they were lost by him on 03.10.2016 when he was visiting the lawyer at Tis Hazari and has also placed on record the NCR report of the same as Ex. PW-1/40. Further, Ex. PW-1/5, i.e. a special power of attorney executed by the plaintiff no.3, one of the co-owners of the suit property, in favour of Sh. Manu Sharma has also been placed on record, authorizing him to CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.39/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. institute a suit against the defendants and also to verify the plaint, amongst other things.''
59. Hence, I find that that the present suit has been properly verified by Sh. Manu Sharma, who has been sufficiently authorized by the plaintiffs vide Ex. PW-1/3 to Ex. PW-1/5. Accordingly, the issue no.3 is decided against the defendants.
Issues no.1, 2 and 4:
60. I shall next decide issues no.1, 2 and 4 together, being connected issues, which are reproduced below for the sake of convenience:
1. Whether the plaintiff is entitled to get a decree of recovery for a sum of Rs. 7,28,143/- against the defendant, as prayed for? OPP
2. Whether the plaintiff is entitled for the interest on the aforesaid amount alongwith pendentelite and future interest, if so, at what rate? OPP
4. Whether there is no cause of action against the defendants? OPD
61. The undisputed facts are that the plaintiffs no.1-3 are CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.40/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. the owners of the suit property, who entered into a registered lease deed dated 26.04.2005 (Ex. PW-1/6) with the defendant 'LIC Housing Finance Ltd'. The contents of Ex.PW-1/6 are reproduced below:
*** LEASE DEED This indenture is made and executed at New Delhi on 26th Day of April, 2005.
BETWEEN M/s. Prithvi Consultants (P) Ltd. a company incorporated under the Companies Act 1956 and having its Corporate Office at Ashoka Tower, C-10, Community Centre, Janak Puri, New Delhi- 110058 through its Director Mr. G.S. Prasad. M/s. Galla Investment Co. (P) Ltd. a company incorporated under the Companies Act, 1956 and having its Corporate Office at "Ashoka Tower" C-10, Community Centre, Janak Puri, New Delhi-110058 through its Director Mr. G.S. Prasad and Mr. Galla Harshavardhan S/o Mr. G. Gundaiah R/o A-5/2, Aditi Apartments 'D' Block, Janak Puri, New Delhi-110058 through his attorney holder Mr. G.S. Prasad hereinafter referred as the LESSORS and the expressions shall mean and include their legal representative, heirs, successors, nominees, assignees and beneficiaries, being the party of the FIRST PART.
AND M/S. LIC Housing Finance Ltd. a company incorporated under the Companies Act 1956 and having its Registered Office at CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.41/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd.
Bombay Life Building 45/47, Veer Nirman Road, Fort, Mumbai-400 001 through its Manager Operation, Mr. P.K. Malhotra, hereinafter referred as the LESSEE and the expressions shall mean and include their legal representative, heirs, successors, nominees, assignees and beneficiaries, being the party of the SECOND PART.
WHEREAS, party of the first part are the owners of Flat Nos. 402, 404 & 406 in the Commercial Building situated at Plot No. 54, B Block Community Centre, Janak Puri, New Delhi-110058. Flat No. 402, Area 441 Sq. Ft. is owned by M/s. Galla Investment Co. (P) Ltd. Flat No. 404, Area 408 Sq. Ft. is owned by Mr. Galla Harshvardhan and Flat No. 406, Area 354 Sq. Ft. is owned by Ms. Prithvi Consultants (P) Ltd.
WHEREAS, the party of second part has approached the party of the first part for taking over at 4th floor of the Building situated 54, B Block Community Centre, Janak Puri, New Delhi-110058, measuring 1203 Sq. Ft. bearing numbers 402, 404 & 406 hereinafter called "DEMISED PREMISES" on lease for the period of 3 years commencing from August 1, 2002 upto July 31, 2005 on the follow-terms and conditions and covenants hereinafter contained, which the party of the first part has too accepted and agreed.
NOW THEREFORE, THIS LEASE DEED WITNESSETH AS UNDER:
1. THAT in consideration of the lease rent hereinafter reserved and of the lessee covenants and terms and conditions CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.42/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd.
hereinafter contained and on the part of the Lessee, to be paid, observed and performed the lessor hereby grants by way of lease to the Lessee the demised premises together with all the rights including the rights to make use of entrances, passages, stair-cases, lifts and other easements belonging to and pertaining to the Demised Premises and to have and hold the same for the period as specified above by paying unto the LESSOR total lease rent detailed herein below and during the said term for the Demised Premises.
2. THAT the Lessee shall pay lease rent of Rs. 36,090/- (Rupees Thirty Six Thousand & Ninety Only) per calender month commencing from August 1, 2002 to July 31, 2005 as follows:
i) M/s. Galla Investment Co. (P) Ltd. Rs. 13,230/- (Flat No.
402)
ii) Mr. Galla Harshvardhan Rs. 12,240/- (Flat No. 404)
iii) M/s. Prithvi Consultants (P) Ltd. Rs. 10,620/- (Flat No.
406)
3. THAT the Lessee will be at option to extend the lease per iod for another three years commencing form August 1, 2005 upto July 31, 2008 and shall pay Rs. 43,308 (Rupees Forty Three Thousand Three Hundred Eight Only). The Lessee will be at option to extend the lease for a further period of another 3 years commencing from August 1, 2008 to July, 31 2011 and shall pay Rs. 51969.60 (Rupees Fifty One Thousand Nine Hundred Sixty nine and Paise Sixty Only). However, a fresh lease deed for the same shall be made and executed to give it effect each time. Further during the period of lease the Lessee shall have the liberty to vacate the Demised Premises, if it find CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.43/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. fit, before the expiry of lease period but only after 12 months of occupancy three-month advance notice on the Lessor.
4. THAT the lessee terms shall be re-negotiated are re-fixed for the further terms after expiry of 9 years, if parties to this deed think fit for further lease of Demised Premises.
5. THAT the Lessee shall hand over the peaceful possession of demised premises back to the lessor on the expiry of the lease period on July 31, 2008, or July 31, 2011 which is the essence of this deed.
THE LESSEE HEREBY COVENANTS WITH THE LESSOR AS FOLLOWS:
6. To pay the monthly lease rent, hereby reserved, on or before 10th day of each month in advance to the Lessor.
7. To make a deposit of Rs. 2,16,540/- (Rupees Two Lakhs Six-inter-teen Thousand Five Hundred Forty Only) with Lessors as an interest free security deposit equivalent to 6 months rent, which shall be refunded by the Lessors on the expiry of the lease period or on termination of lease.
8. To pay all the charges for consumption of electricity and power, whether supplied by DVB and/or generated, as fixed by DVB rate on the basis of Bills raised by M/s. Mahatta Towers Private Limited or through its appointed Maintenance Agency M/s. Rockland Engineers Pvt. Ltd.
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9. To pay Maintenance Charges @ 3.50 per sq. feet directly to maintenance agency, Rockland Engineers Put. Ltd., towards common maintenance and services charges such as cost of lift operation, lighting of common passages, maintenance of Sanitary conditions, common security arrangements, water services DG backup etc. The maintenance is for normal working hours and 5/6 days a week working facility, as asked for. In case the lessee wishes to work for 24 hours a day and 7 days a week, the maintenance charges shall be 200% of normal maintenance charges.
10. To use the Demised Premises for carrying out its permissible commercial activities and shall be legally responsible for all and every act, which deemed or turned out to be illegal, un-authorized or immoral whether the Lessee or any of its employee or agent, whether or not authorized are directly or indirectly involved.
11. Not to sublet, assign or otherwise part with the possession whole or in part of the demised premises. However the Lessee shall be eligible to use the demise premises for carrying out permissible commercial activities of its divisions, sister, concerns, group companies and its subsidiaries only.
12. To keep the interior of the demised premises at its own cost, in good repairs order, harmony and condition.
13. To permit the Lessor, maintenance agency builders and their respective agents, surveyors and workman to enter into the Demised Premises at all reasonable times with a 24 hours CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.45/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. notice for the purpose either of inspection or repairs of the Demised Premises.
14. To abide by the bye-laws, rules and regulations, instructions and orders of the local authorities including MCD, DDA, L&DO, DVB, Chief Fire Officer or any concerned authority in relation to the Demised Premises. THE LESSOR HEREBY COVENANTS WITH THE LESSEE AS FOLLOWS:
15. To pay all the rates and taxes, which are levied on the Demised Premises and are payable to MCD and/or other concerned authority in time.
16. To pay all the dues, charges and levies which are charged on the Demised Premises and payable to the builder, M/s Mahatta Towers Pvt. Ltd. and/or its maintenance agency, M/s Rockland Engineers Pvt. Ltd. in time.
17. To undertake all major repairs other than general repairs which are required to be done by the Lessee in terms of clause 12 above.
18. To undertake and affirm that they are legal and rightful owner of the Demised Premises and are duly empowered, authorized and competent to enter into this lease and will hold Lessee free and harmless of any demands, claims, actions or proceedings by third party in respect and in relation to the quiet possession of the Demised Premises. CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.46/69
Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd.
19. To reserve its right to sell, mortgage, create charge against and part its legal deemed possession of the demised premises, weather in whole or in parts leased to the lessor, to the third party/parties, individually or jointly during the period of lease. In case of such sale only:
A) The lease shall stand transferred automatically in the name of the Buyer of the Demised Premises from the effective to such sale.
B) The lease rent as agreed in the clause 2 and 3 become payable/shall paid in the same manner as agreed hereunder to the Buyer of the Demised Premises.
C) A fresh lease rent agreement shall be made and executed by the party of the second part with the buyer of the Demised Premises.
D) Security Deposit, if any received under in terms of this lease by the party of the first part, shall be refunded by the Lessor to the Lessee and the same shall become payable/shall be under the new agreement as to be executed in terms of clause C as above. However, if agreed among the party of the first part, Lessee and the buyer of demised premises and buyer of demised premises having accepted and acknowledge the receipt of aforesaid deposit from the Lessee, and Lessee according it's consent to do so in writing, the party of the first part shall adjust the aforesaid amount against the sales consideration of the demised premises to be received from the buyer.CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.47/69
Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. E) After the fresh lease agreement in terms of clause C, the lessee shall deal with the buyer of demised promises independently.
HENCE, IT IS MUTUALLY AGREED TO AS FOLLOWS
1. IT IS AGREED between the parties that the lessee has made deposit of Rs. 2,16,540 through Cheque nos 602509, 11, 12 dated 29-7-2002, drawn on Syndicate Syndicate Bank Asaf Ali Road, N. DELHI with the Lessor and Lessor has accepted and acknowledge the receipt of the part of deposit in terms of clause 7. The said deposit shall be refundable to Lessee by the Lessor on expiry of lease period or in case the lease period is extended, after the expiry of extended lease period or in case of lease being terminated before the expiry of the lease period, on termination of lease period, as the case may be. However, the Lessor, shall have unconditional and absolute right to recover any amount on amount unpaid lease and unpaid knowledge claimed agency, dues, charges, bills, and other claims whether rent, outstanding acknowledged or not by the Lessee, but claimed and billed or to be and to be billed by the builder and/or and all and other statutory rates, taxes and whatsoever nature its maintenance against the demised premises. The amount so payable shall be paid to the Lessee upon handing over the peaceful possession of the demised premises to the Lessor and Lessor accepting the same.
2. IT IS AGREED that the lease period shall start from the 2002 for 3 years and shall expire on July 31, 2005. However, it is also agreed the Lessee shall have option to get the same CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.48/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. extended for another 3 years commencing from August 1, 2005 to July 31, 2008 and further extended for another 3 years commencing from August 1, 2008 to July 31, 2011. In that case fresh lease deed shall be made and executed on the same terms and condition and covenants above. The Lessee shall pay the lease rent in terms of clause nos. 2 & 3.
3. IT IS AGREED THAT to inform any change in their respective addresses by both the parties hereto, to each in writing
4. IT IS AGREED THAT in case the lessee fails or does not vacate the demised premises on the expiry of the lease any or on earlier termination of lease due to contravention of any covenants contained herein, the Lessee shall be in unlawful of the demised premises and shall be charged damages @ Rs. 3,000/- (Rupees Three Thousand Only) per day for the period of its unlawful possession and further extended period of non payment of damages.
5. IT IS AGREED THAT in case the Lessor fails or does not pay back the interest free security as payable in terms of agreed above, the Lessee shall claim interest @ 15% for the period of non payment from the date of vacation till the day of payment. clause
6. IT IS AGREED THAT Lessor shall acknowledge the receipt of and every amount from lessee and shall issued a valid receipt duly stamped and signed, which shall be conclusive proof of such payments.
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7. IT IS AGREED THAT the Lessor shall retain the original this leae deed and its copy shall be with the Lessee. of IN WINTESSES WHEREOF, THE PARTIES HERETO HAVE EXECUTED THESE PRESENTS ON THE DAY, MONTH AND YEAR ABOVE WRITTEN IN THE PRESENCE OF THE FOLLOWING WITNESSES.
Witness
1. (LESSOR)
2. (LESSEE) *** (sic.)
62. As per Ex. PW-1/6 the initial lease period was for three years, commencing from 01.08.2002 till 31.07.2005 at a rent of Rs. 36,090/- per month.
63. As per clause no.3 of Ex. PW-1/6, the lessee had an option to extend the lease period for a further three years, i.e. from 01.08.2005 till 31.07.2008 at a rent of Rs. 43,308/- per month. Thereafter, the lessee had an option to further extend the lease period for another three years, i.e. from 01.08.2008 till 31.07.2011 at a rent of Rs. 51,969/- per month.
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64. Although the clause no.3 of Ex. PW-1/6 further provides that a fresh lease deed would be executed between the parties each time, no such lease deed has admittedly been executed between the parties. PW-1 has also categorically admitted in his cross-examination dated 28.02.2018 "It is correct that no further lease deed was executed and registered after Ex. PW-1/6". The clause no.3 (at page 4) and clause no.2 (at page 11) of Ex. PW-1/6 is reproduced below:
At page no.4 of the lease deed dated 26.04.2005:
3. THAT the lessee will be at option to extend the lease period for another three years commencing form August 1, 2005 upto July 31, 2008 and shall pay Rs. 43,308 (Rupees Forty Three Thousand Three Hundred Eight only). The Lessee will be at option to extend the lease for a further period of another 3 years commencing from August 1, 2008 to July 31, 2011 and shall pay Rs. 51969.60 (Rupees Fifty One Thousand Nine Hundred Sixty Nine and Paise Sixty Only). However, a fresh lease deed for the same shall be made and executed to give it effect each time. Further during the period of lease the Lessee shall have the liberty to vacate the Demised Premises, if it find fit, before the expiry of lease period but only after 12 months of occupancy after serving a three-month advance notice on the Lessor.
At page no.11 of the lease deed dated 26.04.2005:
2. IT IS AGREED that the lease period shall start from August, 1, 2002 for 3 years and shall expire on July 31, 2005. However, it is also agreed the Lessee shall have CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.51/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd.
option to get the same extended for another 3 years commencing from August 1, 2005 to July 31, 2008 and further extended for another 3 years commencing from August 1, 2008 to July, 31 2011. In that case a fresh lease deed shall be made and executed on the same terms and condition and covenants above. The Lessee shall pay the lease rent in terms of clause nos. 2 & 3.
(Sic. and Emphasis supplied)
65. It is the plaintiffs' contention that as the period of lease was expiring on 31.07.2011, the plaintiffs sent a letter dated 09.02.2011 (Ex. PW-1/10) to the defendants asking the defendants to either enter into a fresh lease deed at an enhanced rent or vacate the premises. Even after the expiry of the term of the lease on 31.07.2011, the plaintiffs are also stated to have sent letters dated 03.08.2011 (Ex. PW-1/11), 01.11.2011 (Ex. PW-1/12) and 13.06.2012 (Ex. PW-1/14).
66. It would be useful to go through the communication exchanged between the parties at the relevant time chronologically.
67. I must point out that the plaintiffs themselves placed on record along with the plaint, an original letter dated CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.52/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. 15.12.2010 sent by the defendant to the plaintiffs, however the same was not tendered in evidence by them for reasons best known to them. Since the letter dated 15.12.2010 is not a disputed document between the parties and is also referred to by the plaintiffs in their letter Ex. PW-1/11, hence there is no impediment in relying on the same. The said letter dated 15.12.2010 has been sent by the defendant to the plaintiffs informing them that the lease period was going to expire on 31.07.2011 and requesting the plaintiffs to inform them of the new terms and conditions of the lease at the earliest. It was further stated that "You are requested to expedite the same so that necessary approvals can be taken at our end".
68. Thereafter, the plaintiff no.2 sent a letter dated 09.02.2011 (Ex. PW-1/10) making an offer to execute a fresh lease deed for the period beyond 31.07.2011 at a monthly rent of Rs. 95/- per sq. feet, exclusive of maintenance charges (i.e. Rs. 95 x 1203 sq. feet = Rs.1,14,285/- per month), although the current market rent was Rs.100-110 per month, in view of their 'old CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.53/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. association'. The defendants were requested to give their approval to the same.
69. Admittedly, in the meanwhile the lease period also 'expired' on 31.07.2011.
70. The plaintiffs then sent another letter dated 03.08.2011, Ex. PW-1/11 to the defendant informing them they had not heard anything subsequent to their letter dated 09.12.2011 and requested the defendants to confirm their willingness to enter into a fresh lease deed and further stated that "in the meantime, we request you to confirm the terms conveyed to you vide our above referred letter dated 09.02.2011 and pay rental @ Rs. 95/- per sq. feet, w.e.f 01/08/2011".
71. The defendants then sent a letter 09.08.2011 (Ex. PW-1/16) to the plaintiff no.2 stating that they intended to continue in the suit property and had sent the matter for approval to their higher officials, which was expected soon. CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.54/69
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72. Thereafter, for almost three months, there was no written communication from the defendant with respect to any approval. The plaintiffs then sent another letter dated 01.11.2011 (Ex. PW-1/12) to the defendant stating that despite the earlier letters dated 09.2.2011 and 03.08.2011 and the letter of the defendant dated 09.08.2011, three months had passed and nothing had been heard from the defendants. The plaintiffs requested the defendant to sign the fresh lease deed and deposit the security deposit and pay the rent from 01.08.2011. The contents of letter dated 01.11.2011, Ex. PW-1/12 are reproduced below:
*** Dated 01.11.2011 To, The Regional Manager LIC Housing Finance Limited, Jeevan Deep Building, 2nd Floor, 10 Sansad Marg, New Delhi-110001.
Sub: Lease of our Premises to LICHFL Delay in signing the leasing Agreement and payments of Lease rental thereof.
Ref 1. your Letter dated 15.12.2010
2. Our Letter dated 09.02.2011 & 03.08.2011
3. Your letter dated 09.08.2011 Dear Sir, CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.55/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. As you are kindly aware that we vide our letter dated 09.02.2011 had issued notice to you advising you to vacate the premises on expiry of the Lease period of 31.07.2011. In this, you vide your letter under reference 1 above, you have shown your interest to enter into fresh lease and accordingly asked us to intimate you the terms and conditions of the new Lease.
In response to your above letter under reference 1 above, we vide our above referred letter dated 09.02.2014-intimated you the terms and conditions for the fresh lease and requested you to convey your acceptance of the same. Thereafter we have been reminding you telephonically and personally through your office at B Block, Janak Puri for your early response. Since we did not receive any response from you, we, vide our letter dated 03.08.2011 under reference 2 above, again reminded you to convey your acceptance of the terms and conditions stated vide our letter dated 9-02-2011 under reference. After persistent follow ups thereafter with you, you vide your letter dated 09.08.2011 confirmed that the approval of the terms and conditions of new lease is expected and assured that the revised lease agreement will be signed affective from 01.08.2011.
Thereafter, though 3 months have passed, we did not hear anything from you and as agreed neither Lease Agreement is being signed nor the Lease rental along with the security deposit is being paid to us thereby blocking our money. In view of the above, we request you to sign the revised lease deed and release the new with effect from 01.08.2011 and security deposit together with the interest without further delay or else please vacate our premises immediately duly clearing our dues as it is long overdue.
An early action in the above is requested please. Thanking you.
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Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. Yours faithfully, For M/S. GALLA INVESTMENT CO. (P) LTD.
For M/S. PRITHVI CONSULTATNS (P) LTD.
FOR MR. GALLA HARSHVARDHAN C.C.:
1. Ms. K. Jayanti, 54 Mahatta Tower, 4th Floor, B-1, Community Centre, Janak Puri, New Delhi-110058.
2. Mr. D. Kalra, Jeevan Deep Building, 2nd Floor, 10 Sansad Marg, New Delhi-110001.
***
73. After the passage of another month, the defendant replied to the letter of the plaintiff on 08.12.2011 (Ex. PW-1/17) in which it stated that "as the approval has not been received till date, for the time being, you are requested to atleast accept the cheques at the old rate and also advise if the loan amount deduction may also be adjusted. The difference in the rates can be settled as soon as we get the approval."
74. After the passage of almost a further three months, as the defendant had still neither accepted nor rejected the plaintiff's offer of renewal of the lease @ Rs. 95/- per sq. ft, the plaintiffs wrote another letter dated 25.02.2012 (Ex. PW-1/13), wherein the plaintiffs stated that " ...we are accepting the cheques at the old rate under protest pending CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.57/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. receipt of rentals @ Rs. 95.00 per sq. ft as notified to you vide our letter dated 05.12.2011..." and requested the defendant to convey its decision at the earliest.
75. However, almost four months then elapsed and again there was no acceptance or rejection of the plaintiff's offer by the defendant. The plaintiffs then wrote another letter dated 13.06.2012 (Ex. PW-1/14) and gave the defendant final notice to vacate the suit premises within 30 days alongwith payment of the arrears of the rent @ Rs. 95/- per sq. feet after deduction of the rent paid at the old rate, with effect from 01.08.2011.
76. The defendant replied to the notice to vacate the suit property after more than a month, vide its e-mail dated 17.07.2012 (Ex. PW-1/9) and sought further two months time to vacate the suit property and remained silent with respect to the demand of payment of rent @ Rs. 95/- per sq. feet.
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77. The plaintiffs then sent a letter dated 02.08.2012 (Ex. PW-1/8) to the defendant, in which the plaintiffs recorded that they had agreed to the request of the defendant for further two months time to vacate the suit property, however reiterated their demand that the defendant pay the rent @ Rs. 95/- per sq. feet.
78. After more than a month, the defendant sent another e-mail dated 13.09.2012 to the plaintiffs, in which it was stated that the defendant had finalized another office location at BF/2, First Floor, Janak Puri, Delhi - 110058 and they would take time to establish their new office there and sought a further extension of two months time to vacate the suit property.
79. It is not in dispute that on 12.11.2012, the defendant handed over the possession of the suit property to the plaintiffs and a Letter of handover of possession dated 12.11.2012 (Ex. PW-1/D1) was also issued by the defendant.
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80. Thereafter, the defendant wrote a letter dated 17.11.2012 (Ex. PW-1/21) to the plaintiffs and for the first time disputed the liability to pay rent @ Rs. 90/sq. ft. by stating that "The monthly rent demanded is not reasonable as the increase of rent by 92% is not justified" and further stated that "We are the existing tenants and using the premises since 2002, keeping the long relationship in mind ans as per our norms, we can increase rent upto 25% of existing rent. So competent authority had accorded approval to increase the rent by 25% (Rs. 51969/- + 25% of Rs. 51969 = Rs. 64,961/-, and further claimed an amount of Rs. 17,763/- on account of TDS from the defendant.
81. The plaintiffs then sent their letter dated 27.11.2012, Ex. PW-1/22 in which they stated that during September, 2012 the parties had agreed to a rent of Rs. 90/- per sq. ft. with effect from 01.08.2011 and demanded the same from the defendant.
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82. The defendant did not reply to the said letter dated 27.11.2012 and the plaintiffs again sent another letter dated 04.02.2013, Ex. PW-1/25, seeking Rs. 3,000/- per day from the defendant, invoking clause no.4 of the lease deed dated 26.04.2005, Ex. PW-1/6, totally amounting to Rs. 14,07,300/- along with interest of 18% p.a.
83. The defendants again did not give any reply to the said letter dated 04.02.2013, resulting in the issuance of the legal notice dated 02.04.2013, Ex. PW-1/16, to which again no reply was sent by the defendant.
84. As already mentioned earlier, the parties had initially entered into a registered lease agreement dated 26.04.2005, Ex. PW-1/6, in which clause no.3 specifically provided that the lease was initially for a three year period from 01.08.2002 till 31.07.2005. Thereafter, the same could be 'extended' further at the defendant's option, for a further three years from 01.08.2005 till 31.07.2008 and thereafter another three years from 01.08.2008 till 31.07.2011. CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.61/69
Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. Although clause no.3 uses the term 'extend', the clause no.3 itself clearly provides that "However,, a fresh lease deed for the same shall be made and executed to give it effect each time."
85. In the present case, admittedly apart from the registered lease deed Ex. PW-1/6, no other lease deed has been entered into between the parties. Accordingly, the status of the defendant from 01.08.2005 till 31.07.2011, in the absence of any written and registered lease deed, was that of a 'tenant by holding over' under a month to month tenancy as per section 116 of the Transfer of Property Act, 1882, which is reproduced below for the sake of reference:
116. Effect of holding over.--If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in section 106.
Illustrations
(a) A lets a house to B for five years. B underlets the house to C at a monthly rent of Rs. 100. The five years expire, but C continues in possession of the house and pays the rent to A. C's lease is renewed from month to month.
(b) A lets a farm to B for the life of C. C dies, but B continues CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.62/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. in possession with A's assent. B's lease is renewed from year to year.
86. The Hon'ble Apex Court in the decision of R.V. Bhupal Prasad v. State of A.P., (1995) 5 SCC 698, has pointed out the difference between a 'tenant at sufferance' and a 'tenant by holding over':
"8. Tenant at sufferance is one who comes into possession of land by lawful title, but who holds it by wrong after the termination of the term or expiry of the lease by efflux of time. The tenant at sufferance is, therefore, one who wrongfully continues in possession after the extinction of a lawful title. There is little difference between him and a trespasser. In Mulla's Transfer of Property Act (7th Edn.) at page 633, the position of tenancy at sufferance has been stated thus: A tenancy at sufferance is merely a fiction to avoid continuance in possession operating as a trespass. It has been described as the least and lowest interest which can subsist in reality. It, therefore, cannot be created by contract and arises only by implication of law when a person who has been in possession under a lawful title continues in possession after that title has been determined, without the consent of the person entitled. A tenancy at sufferance does not create the relationship of landlord and tenant. At page 769, it is stated regarding the right of a tenant holding over thus: The act of holding over after the expiration of the term does not necessarily create a tenancy of any kind. If the lessee remains in possession after the determination of the term, the common law rule is that he is a tenant on sufferance. The expression "holding over" is used in the sense of retaining possession. A distinction should be drawn between a tenant continuing in possession after the determination of the lease, without the consent of the landlord and a tenant doing so with the landlord's consent. The former is called a tenant by sufferance in the language of the English law and the latter class of tenants is called a tenant holding over or a tenant at will. The lessee holding over with the consent of the lessor is in a better position than a mere tenant at will. The tenancy on sufferance is converted into a tenancy at will by the assent of the CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.63/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd.
landlord, but the relationship of the landlord and tenant is not established until the rent was paid and accepted. The assent of the landlord to the continuance of the tenancy after the determination of the tenancy would create a new tenancy. The possession of a tenant who has ceased to be a tenant is protected by law. Although he may not have a right to continue in possession after the termination of the tenancy, his possession is juridical."
87. The Hon'ble High Court of Delhi has held in the decision of M/s Uptron Powertronics Ltd vs. G. R. Rawal, 1999 SCC Online Del 504, as follows:
"The next question that arises is whether a fresh lease deed or an extension/renewal of the earlier lease deed is required to be through a registered instrument. There is no dispute that the lease was intended for a block of three years at a time. As a result, the parties entered into an agreement in 1990, 1993 and eventually in 1996. Paragraph 1 of Section 107 of the Act makes it very clear that a lease of immovable property exceeding one year can only be made by a registered instrument. Admittedly, in the present case apart from the lease deed entered into between the parties on 17th July, 1984 no registered instrument was drawn up by the parties. It is, therefore, quite clear that in the absence of a registered instrument, the nacessary consequences will flow. This means that the tenancy was only on a month to month basis. Consequently, the Respondent could terminate the tenancy by a notice under Section 106 of the Act, which in fact, he did by issuing a notice dated 2nd April, 1997 followed by another notice dated 5th November, 1997. The Appellant has not denied receipt of the latter notice.
In view of the above, we have no doubt in our minds that the lease deed dated 17th July, 1984 could not be unilaterally revoked by either party during the initial period of three years. The parties had mutually agreed to extend the lease for a period of three years at a time after expiry of the initial period. However, in the present case, the extension in the second and subsequent block of three years was not by a registered instrument; consequently, it was only a month to month tenancy which could be (and was) terminated in accordance with the provisions of Section 106 of the Act. We, therefore, CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.64/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd.
hold that the second requirement mentioned in Surjit Sachdev's case is satisfied. We are of opinion that the learned Additional District Judge, Delhi was right in allowing the Respondent's application under Order XII Rule 6 of the CPC."
(Emphasis supplied)
88. The Hon'ble High Court of Delhi has held in the decision of MEC India (P) Ltd. vs. Lt. Col. Inder Maira , 1999 SCC OnLine Del 422 : (1999) 80 DLT 679 as follows:
(which has been quoted with approval by the Hon'ble Apex Court in Raj Pal Singh v. CIT, (2021) 13 SCC 489 and Nand Ram v. Jagdish Prasad, (2020) 9 SCC 393 as well).
"48. Thus, a tenant at sufferance is one who wrongfully continues in possession after the extinction of a lawful title and that a tenancy at sufferance is merely a legal fiction or device to avoid continuance in possession from operating as a trespass. A tenant remaining in possession of the property after determination of the lease does not become a trespasser, but continues as a tenant at sufferance till possession is restored to the landlord. The possession of an erstwhile tenant is juridical and he is a protected from dispossession otherwise than in due course of law. Although, he is a tenant, but being one at sufferance as aforesaid, no rent can be paid since, if rent is accepted by the landlord he will be deemed to have consented and a tenancy from month-to-month will come into existence. Instead of rent, the tenant at sufferance and by his mere continuance in possession is deemed to acknowledge both the landlord's title and his (tenant's) liability to pay mesne profits for the use and occupation of the property."
89. In the present case, the reliance of the plaintiffs on CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.65/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. clause no. 4 at page no.12 of the lease deed Ex. PW-1/6 is entirely misplaced as no subsequent lease deed has admittedly been entered into between the parties after 31.07.2005.
90. Further, the plaintiffs have permitted the defendant to continue in possession with their consent even for the period from 1.08.2011 till the vacation of the suit property on 12.11.2012. For the said period, the defendant has paid a rent of Rs. 51,969/- per month to the plaintiffs, which has been accepted under protest. The plaintiffs have filed the present suit seeking damages of Rs. 3,000/- per day from the defendant, along with interest @ 15% p.a., by invoking clause no. 4 of the lease deed dated 26.04.2005, Ex. PW-1/6. As already mentioned, since the clause in question required a fresh lease deed to be executed between the parties for the period beyond 01.08.2005, the plaintiffs cannot seek to invoke the said clause no.4 against the defendant without there being a fresh registered lease deed executed between the parties incorporating the said liquidated damages. CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.66/69
Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. Hence, the plaintiffs cannot be permitted to rely on clause no.4 of Ex. PW-1/6, which admittedly stood expired on 31.07.2005 and the status of the defendant from 01.08.2005 till 12.11.2012 was that of a 'tenant by holding over'.
91. As per section 106 of the Transfer of Property Act, a lease of immovable property for any purpose apart from agricultural or manufacturing purpose, in the absence of any written contract, is deemed to be a lease from 'month to month' terminable on the part of either party by giving fifteen days notice.
92. Hence, it was always open to the plaintiffs to terminate the tenancy of the defendant from 01.08.2011 onwards by giving a termination notice to them as per section 106 of the Transfer of Property Act for failure to enter into a fresh lease at the escalated rent as proposed by them, however no such notice was admittedly issued by the plaintiffs till 13.06.2012. It was only through their letter dated 13.06.2012 , Ex. PW-1/14 that the plaintiffs asked the CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.67/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. defendant to vacate the suit property within 30 days. Further, vide their letter dated 02.08.2012, Ex. PW-1/18 the plaintiffs also acceded to the request of the defendant to further extend the time by two months. The defendants ultimately vacated the suit property on 12.11.2012, within the extended time period as consented to by the plaintiffs.
93. Hence, what emerges is that the possession of the defendant in the suit property from 01.08.2005 uptil 12.11.2012 was that of a tenant by holding over and the defendant has also duly paid the rent for the said period, which has been accepted by the plaintiffs. For the period 01.08.2011 onwards, the plaintiffs had the option to terminate the tenancy of the defendants by resorting to a notice of termination as per section 106 of the Transfer of Property Act, however, the plaintiffs only issued the same on 13.06.2012, giving the defendant thirty days to vacate the suit property. The plaintiffs also accepted the defendants request for extension of the period to vacate the suit property by two months and the suit property was vacated CS DJ No.611149/16 Prithvi Consultants Pvt. Ltd. Vs. LIC Housing Finance Ltd. Page No.68/69 Prithvi Consultants Pvt. Ltd.Vs. LIC Housing Finance Ltd. within the said period on 12.11.2012. Hence, no part of the defendant's occupation of the suit property can be said to be unauthorized or even liable to attract clause no.4 of the lease deed dated 26.04.2005, Ex. PW-1/6, which stood expired on 31.07.2005 itself.
94. Accordingly, the issues no.1 and 2 are decided against the plaintiffs. The issue no.4 is decided in favour of the defendant.
Relief
95. In view of the aforementioned facts and circumstances, the suit of the plaintiffs is dismissed, with no order as to costs. Decree sheet be drawn up accordingly. File be consigned to the record room after due compliance.
Digitally
signed by
JITEN
JITEN
Announced in the open court (JITEN MEHRA)
MEHRA
MEHRA Date:
2025.09.09
on 09.09.2025 DJ-10/Central/THC 16:31:05
+0530
Delhi.
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