Delhi District Court
M/S. Indian Sulphacid Industries Ltd vs M/S. Vijay Ashok Parmod on 29 February, 2012
IN THE COURT OF SH. SAURABH KULSHRESHTHA:
CCJ:ARC(EAST):KARKARDOOMA COURTS: DELHI
Civil Suit no: 1345/08
ID No.02402C0317572008
M/s. Indian Sulphacid Industries Ltd.,
4, Deen Dayal Upadhyaya Marg,
New Delhi-110002 .... Plaintiff
Versus
M/s. Vijay Ashok Parmod, HUF,
through Karta/Manager
R/o 111, Saini Enclave,
Karkardooma, Delhi-110092 .... Defendant
SUIT FOR RECOVERY OF POSSESSION,
ARREARS OF RENT AND DAMAGES/MESNE PROFITS
Date of institution of the Suit : 28.04.2008
Date on which judgment was reserved : 04.02.2012
Date of decision : 29.02.2012
Decision : Suit Decreed
JUDGMENT
This is a conventional suit for recovery of possession, arrears of rent and damages/mesne profits filed by a landlord against a tenant whose tenancy stands allegedly determined.
2. The version of the plaintiff is that the defendant through its karta had taken on lease from the plaintiff a plot of land measuring CS no: 1345/08 Page No: 1/91 316.66 sq. yds. bearing private no. 23 and more specifically shown in red colour in the site plan (herein after referred to as the suit plot) and forming part of the estate known as the Indian Sulphacid Industries Compound (also known as the Shambhu Nath Compound) bearing Municipal No. 458-466, Gali no. 8, Friends Colony, G.T. Road, Shahdara, Delhi, vide an unregistered lease deed dated 06.04.1985 followed by another unregistered lease deed dated 06.03.1995. The last agreed rate of rent is Rs. 237.49 per month exclusive of electricity and water charges.
3. It is further the case of the plaintiff that the lease was granted with the permission to construct a super structure on the demised plot of land on a clear understanding and agreement that on the determination of the said lease, the defendant would vacate and deliver the possession of the demised/ suit plot by removing the super structure/ building, if any constructed thereupon.
4. It is further the case of the plaintiff that the tenancy in question was a month to month tenancy commencing on the 6th day of each English calender month and ending on 5th day of the succeeding CS no: 1345/08 Page No: 2/91 month.
5. It is further the case of the plaintiff that the plaintiff issued a legal notice dated 10.03.2008 upon the defendant by registered post as well as by UPC thereby terminating the tenancy of the defendant qua the suit plot and calling upon the defendant to remove the super structure and hand over the possession of the suit plot to the plaintiff on expiry of the period stipulated in the legal notice along with arrears of rent. The defendant was duly served with the said legal notice. However, the defendant neither replied the said legal notice nor complied with the conditions stipulated therein.
6. The plaintiff has claimed that after termination of tenancy, the possession of the defendant in the suit property is unauthorized and illegal and the defendant is liable to vacate and handover the possession of the suit plot to the plaintiff. The plaintiff has therefore prayed for a decree of recovery of possession in respect of the suit plot. The suit has been instituted through Sh. Ajay Maheshwari, the General Manager and principal officer of the plaintiff company who is stated to be duly authorized by the plaintiff company to sign and verify the plaint and CS no: 1345/08 Page No: 3/91 institute the present suit.
7. It is further the case of the plaintiff that the defendant has not paid the rent and is in arrears of rent w.e.f. 06.02.2005 and thus the defendant is liable to pay an amount of Rs. 8,549.64/- w.e.f. 06.02.2005 till the date of institution of the suit towards arrears of rent @ Rs. 237.49 per month along with pendente lite and future interest @ 15% per annum. The plaintiff has further claimed pendente lite and future damages/mesne profits @ Rs. 15 per sq. feet per month which works out to a total of Rs. 42,750/- per month for the suit plot.
8. The defendant appeared pursuant to the service of summons and filed its written statement. The defendant pleaded that the defendant is a permanent and perpetual tenant in respect of the suit property and cannot be evicted as the lease deed was coupled with a grant to raise a permanent super structure for use of industrial or commercial purposes and pursuant to such grant, the defendant has constructed a super structure on the plot of land having acted upon the representations of the plaintiff.
CS no: 1345/08 Page No: 4/91
9. The defendant further pleaded that the suit is barred by the provisions of section 50 of the Delhi Rent Control Act as pursuant to the lease deed dated 06.04.1985 the defendant has constructed a building for carrying out industrial activity and under the law and principles of vesting and accession to the land, the superstructure so constructed by the defendant is deemed to be comprised in the lease deed dated 06.04.1985.
10. The defendant further pleaded that when the lease was renewed on 06.03.1995 the plot was not in existence as the building had been constructed thereon in the year 1986 and therefore the lease was in respect of a premises and not in respect of a plot of land. The defendant pleaded that therefore the defendant is a tenant in respect of a premises as defined under the Delhi Rent Control Act and the rate of rent being Rs.237.49 per month only the defendant is protected under the Delhi Rent Control Act. Hence the present suit is barred under the provisions of section 50 of the Delhi Rent Control Act.
11. The defendant further pleaded that no notice under Section 106 of the Transfer of Property Act has been served upon the defendant CS no: 1345/08 Page No: 5/91 and hence the tenancy of the defendant has not been duly terminated and thus the suit is not maintainable. The defendant further pleaded that since the lease deed was for industrial purposes, the same is deemed to be a lease from year to year terminable by a six months' notice only and since the notice issued by the plaintiff was merely a fifteen days' notice, therefore the said notice was not in accordance with the provisions of section 106 of the Transfer of Property Act.
12. The defendant further pleaded that the suit is liable to be dismissed as the plaintiff is guilty of suppressio veri and suggestio falsi.
13. The defendant has further pleaded that the defendant vide letter dated 01.06.2007 (issued by Mrs. Madhu Bhandari) had remitted the rent in respect of the suit property for a further period of 9 years and 11 months through Demand Draft dated 01.06.2007 for an amount of Rs. 28,262/- drawn on DCB Bank. The said letter and Demand Draft were duly received by the plaintiff and therefore the claim for recovery of arrears of rent is not maintainable.
14. The defendant further pleaded that the tenancy was an CS no: 1345/08 Page No: 6/91 yearly tenancy and the plaintiff has already accepted rent upto 05.01.2014 and therefore the tenancy cannot be terminated.
15. The defendant further pleaded that the suit is not maintainable as the plaintiff is seeking relief with respect to a non existent and unidentifiable subject matter as no plot of land exists at the site and a permanent superstructure in the form of an industrial building has been constructed by the defendant on the plot of land and after such construction the identity of the plot is non existent.
16. The defendant further pleaded that the suit is bad and not maintainable as the defendant and his family members had built up a joint and inseparable super structure in the form of an industrial building over plot no. 23 (suit plot) and adjoining plots no. 20, 21 and 22 and now the plaintiff cannot file the present suit in respect of the industrial building constructed jointly over all the aforesaid plots.
17. The defendant further pleaded that the plaintiff cannot seek demolition of the building constructed by the defendant nor has the plaintiff actually sought any such relief. Hence the suit is not CS no: 1345/08 Page No: 7/91 maintainable.
18. The defendant further pleaded that the suit property is mortgaged with financial institutions and the present suit has been filed by the plaintiff without seeking leave of the Debt Recovery Tribunal and in violation of the order passed by the Debt Recovery Tribunal against the plaintiff. The defendant further pleaded that the plaintiff company is a sick company as the reference filed by the plaintiff is pending with the BIFR and hence the present suit is not maintainable.
19. The defendant further pleaded that the lease agreements are violative of sections 20 and 23 of the Indian Contract Act.
20. The defendant further pleaded that the suit of the plaintiff is barred by the doctrine of estoppel, waiver and acquiescence. The defendant pleaded that acting on the assurances and representations of the plaintiff, the defendant constructed a permanent structure over the suit plot investing huge amount of money and the defendant was also having the right to sublet and transfer the lease and therefore the plaintiff is now estopped from filing the present suit.
CS no: 1345/08 Page No: 8/91
21. The defendant further pleaded that the suit is not maintainable as the site plan is not correct and does not depict the building constructed on the suit plot.
22. The defendant further pleaded that the plaint has not been signed and verified and the suit has not been instituted by a duly authorized person. The defendant further denied that Sh. Ajay Maheshwari is the General Manager and principal officer of the plaintiff company and was duly authorized by the plaintiff company/ competent to sign and verify the plaint and institute the present suit.
23. The defendant denied that he is in arrears of rent since 06.02.2005. The defendant denied that he is liable to pay an amount of Rs.8,549.64/- towards arrears of rent. The defendant denied that he is liable to pay damages/ mesne profits. The defendant further pleaded that the mesne profits being claimed by the plaintiff are excessive and exorbitant.
24. The defendant denied that his tenancy has been CS no: 1345/08 Page No: 9/91 determined. The defendant denied that he is liable to vacate the suit plot. The defendant prayed for dismissal of the suit.
25. Plaintiff filed replication and denied the averments of the written statement of the defendant and simultaneously reiterated and reaffirmed the contents of the plaint.
26. The plaintiff further averred that the plaintiff had only let out a plot of land to the defendant and the subject matter of lease was only an open plot of land. The super structure constructed by the defendant belongs to the defendant and the plaintiff has no right, title or interest in any superstructure constructed by the defendant. The lease is therefore not in respect of a premises but only in respect of a plot of land. Hence the Delhi Rent Control Act is not applicable in the facts and circumstances of the present case and the suit is not barred under section 50 of the Delhi Rent Control Act.
27. The plaintiff further averred that the defendant is therefore entitled and liable to remove such super structure and deliver the vacant possession of the suit plot to the plaintiff as the tenancy of the defendant CS no: 1345/08 Page No: 10/91 has been duly terminated. The plaintiff further stated that the tenancy of the defendant was a month to month tenancy determinable by 15 days' notice as no registered lease deed was executed. The plaintiff denied that the tenancy of the defendant was an yearly one or from year to year.
28. The plaintiff denied that it is guilty of supressio veri or suggestio falsi or has come to the court with unclean hands. The plaintiff denied having received the rent. The plaintiff further reiterated that defendant is in arrears of rent w.e.f. 06.02.2005. The plaintiff reiterated that the plaintiff is entitled to recover mesne profits.
29. The plaintiff denied that the plaintiff company is admitted/registered as a sick company under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985. The plaintiff further stated that there is no bar on filing of the present suit on this count. The plaintiff further stated that the defendant has no concern with any dispute between plaintiff on the one hand and any other financial institution on the other hand and such financial institutions are neither necessary nor proper parties to the present suit.
CS no: 1345/08 Page No: 11/91
30. The plaintiff denied that the suit is violative of sections 20 and 23 of Contract Act. The plaintiff denied that the suit is barred under the doctrine of waiver, acquiescence and estoppel.
31. The plaintiff reiterated that the plaint has been properly signed and verified by Sh. Ajay Maheshwari who was the principal officer and General Manager of the plaintiff company and he was duly authorized to sign and verify the plaint and institute the present suit.
32. The plaintiff reiterated that the tenancy of the defendant has been duly terminated and the possession of the defendant in the suit plot has become illegal and unauthorized and the defendant is liable to vacate the same. The plaintiff has prayed that the suit be decreed in its favour.
33. Vide order dated 20.09.2008, on the basis of the pleadings of the parties the following issues were framed in this case:
1. Whether the lease deeds dated 06.04.1985 and 06.03.1995 were executed in perpetuity? OPD
2. Whether the tenancy of the defendant has not been terminated according to the provisions of the Transfer of Property Act? OPD CS no: 1345/08 Page No: 12/91
3. Whether the suit is barred in view of the provisions of Section 50 of the Delhi Rent Control Act? OPD
4. Whether the plaintiff has suppressed or concealed any material facts? OPD
5. Whether the plaintiff is entitled for a decree of possession as prayed for in the plaint? OPP
6. Whether the plaintiff is entitled for recovery of arrears of rent? If so at what rate and for what period? OPP
7. Whether the plaintiff is entitled for damages/mense profits? If so at what rate and for what period?
8. Whether the plaintiff entitled to any interest? If so, at what rate?
9. Relief
34. Vide order dated 06.07.2009 the following additional issue no. 8A was framed in this case:
8A. Whether present suit has been signed, verified and filed by a duly authorized person on behalf of the plaintiff? OPP
35. In order to prove its case the plaintiff examined Sh. K.K. Julka, an employee of the plaintiff company as PW 1. PW 1 deposed on the lines of the plaint. He has exhibited the certified true copy of the relevant extract of Board resolution/ Minute book dated 11.02.2008 as Ex. PW-1/1. The site plan of the suit plot is Ex. PW-1/3. Copy of the CS no: 1345/08 Page No: 13/91 legal notice dated 10.03.2008 and the postal receipts are Ex. PW-1/4 to Ex. PW-1/6. The original AD card is Ex. PW 1/7.
36. As against this the defendant examined Sh. Ashok Bhandari, Karta of the defendant as DW-1 who deposed on the lines of the written statement. The notices, assessment orders property tax bills and receipts etc issued by MCD in respect of property no. 537 A/1, Friends Colony Shahdara and received by the defendant are Ex. DW 1/1 to Ex. DW 1/14. Copies of documents from EPFO and ESIC showing that the superstructure belongs to the defendant are Ex. DW 1/15 to Ex. DW 1/22. Copy of the letter dated 01.06.2007 (seeking renewal of lease), postal receipt and AD card are Ex. DW 1/23 to Ex. DW 1/25. The official from MCD was also examined as DW 2 who also proved the documents Ex. DW 1/1 to Ex. DW 1/14.
37. I have heard at length Sh. Pawan Kumar Aggarwal, Ld. Counsel for the plaintiff and Sh. Pradeep Aggarwal and Sh. Deep Dhameeja, Ld. Counsel for the defendant and have given due consideration to the rival contentions of the parties and carefully perused the record. My issue-wise findings are as follows:
CS no: 1345/08 Page No: 14/91 Issue no. 1
38. The question to be answered is as to whether the lease deeds dated 06.04.1985 and 06.03.1995 were executed in perpetuity or not.
39. The defendant has contended that the tenancy in question was a permanent tenancy. On the other hand the plaintiff has contended that the tenancy in question was a month to month tenancy.
40. The defendant has contended that under the lease in question permission was granted to the defendants to raise a permanent superstructure over the suit plot and the defendant constructed an industrial building thereupon in view of the grant utilizing his own funds. The defendant has further contended that under the terms of the lease deeds the defendant had a right to transfer the lease in question. The defendant has further contended that in view of these conditions associated with the lease it is to be presumed that the lease in question was a permanent lease.
CS no: 1345/08 Page No: 15/91
41. The Counsel for the defendant has placed reliance on the judgments titled as Sivayogeswara Cotton Press Vs. M. Panchaksharappa reported as AIR 1962 SC 413, M.C.D. Vs. Shashnak Steel Industries (P) Ltd. reported as AIR 2009 SC 967, Swami Jain Ram Chela Sarju Das Vs. Hari Singh reported as AIR 1967 Punjab 159, Bavasahed Walad Vs. West Patent Press Co. Ltd. reported as AIR 1954 Bombay 257 and A.H. Forbes Vs. L.E. Ralli reported as AIR 1925 PC 146 in this respect.
42. There is no dispute about the fact that under the lease the defendant was permitted to raise a superstructure and the defendant at his own cost constructed an industrial building over the suit plot. Both PW 1 and DW 1 have deposed in this respect.
43. However PW 1 unequivocally deposed in his examination in chief that the tenancy was a month to month tenancy. In his cross examination PW 1 denied the suggestion that the tenancy of the defendant was a permanent one.
44. The counsel for the defendant has contended that the right CS no: 1345/08 Page No: 16/91 to transfer the lease was granted to the defendant which gives an indication that the tenancy was a permanent tenancy. First of all under section 108(j) of the Transfer of Property Act a lessee may transfer absolutely or by way of mortgage or sub-lease the whole or any part of his interest in the property. Thus the right of the lessee to transfer the lease is statutorily recognized (in the absence of any contract to the contrary) and was not in any manner peculiar to the lease in question. Therefore the mere fact that the lessee had the right to transfer the lease does not in any manner give rise to the presumption that the lease was a permanent lease.
45. The prime contention of the defendant, however is that since the lease was granted for building purposes therefore there is a presumption that the lease in question was a permanent lease and the lease in fact was a permanent lease.
46. First of all the admissibility of the lease deeds in question in evidence needs to be considered. Admittedly the lease deeds are unregistered lease deeds. The contention of the defendant is that the lease deeds were for a period of 9 years and 11 months.
CS no: 1345/08 Page No: 17/91
47. Under section 107 of the Transfer of Property Act a lease of immovable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered instrument. Such a lease is a compulsorily registrable document under section 17 of the Registration Act. Under section 49 of the Registration Act in case such a lease is not registered the same does not affect any immovable property comprised therein and cannot be received as evidence of any transaction affecting such property. However it may be received as evidence of any collateral transaction under the proviso to section 49 of the Registration Act.
48. In the judgment titled as "Anthony v. K.C. Ittoop"
reported as AIR 2000 SUPREME COURT 3523 it was held:
" ...Non-registration of the document had caused only two consequences. One is that no lease exceeding one year was created. Second is that the instrument became useless so far as creation of the lease is concerned....."
49. In the judgment titled as Amar Chand Talwar v. Export CS no: 1345/08 Page No: 18/91 Promotion Council for Handicrafts, reported as 1999(2) Civil C.C. 508 (Delhi High Court) it was held:
" ... ... ... ..Section 107 of the Transfer of Property act postulates that a lease of immovable property form year-to-year, of for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. in the absence of registered instrument, it must be monthly lease. In view of the said provisions, since the lease was for a period exceeding one year, it could only have been extended by a registered instrument, it must be monthly lease. In view of the said provisions, since the lease was for a period exceeding one year, it could only have been extended by a registered instrument, the lease shall be deemed to be a "lease from month-to- month". The unregistered lease deed dated 3.6.1986 is clearly inadmissible in evidence under Section 49 of the Registration Act, except for the collateral purpose of proving the nature and character of possession of the present case inasmuch as the terms of a lease are not a "collateral purpose" within its meaning - Satish Chand v. Govardhan Das, AIR 1984 S.C.143. Thus, the lease deed dated 3.6.1986 is inadmissible in evidence to prove the transaction of lease. It was also ineffectual to create a valid lease for a renewed term for want of registration under Section 17 of the Registration Act.... ... .."
CS no: 1345/08 Page No: 19/91
50. In the judgment titled as Satish Chand Makhan v. Goverdhan Dass Byas reported as AIR 1984 SC 143 it was held:
" ... ... ... .The unregistered draft lease agreement Exhibit B-2 was clearly inadmissible in evidence under Section 49 of the Registration Act, except for the collateral purpose of proving the nature and character of possession of the defendants. The document Exh. B-2 was admissible under the proviso to Section 49 only for a collateral purpose of showing the nature and character of possession of the defendants. The proviso to Section 49 was however not applicable in the present case in as much as the terms of a lease are not a "collateral purpose" within its meaning. It follows that the unregistered draft lease agreement Exh. B-2 was inadmissible in evidence to prove the transaction of lease. It was also ineffectual to create a valid lease for a renewed term of nine years for want of registration as required under S. 17(1)(d) of the Registration Act... .."
51. In view of the settled legal position it is therefore clear that the lease in question for a period of 9 years and 11 months could have been made by way of a registered instrument only. Since the lease deeds CS no: 1345/08 Page No: 20/91 in question are unregistered they cannot be read in evidence nor do they result in creation of a lease for a period greater than 1 year. The terms of a lease deed cannot be labeled as collateral transactions and therefore no reference can be made to the terms of the lease deed in question.
52. Moreover an unstamped or deficiently stamped document (here lease deed) cannot be admitted in evidence for any purpose whatsoever in terms of section 35 of the Indian stamp Act. Reference may be made to the judgments titled as Avinash Kumar Chauhan v. Vijay Krishna Mishra reported as AIR 2009 SUPREME COURT 1489 and M/S Sms Tea Estates P.Ltd. vs M/S Chandmari Tea Co. P. Ltd, reported as V (2011) SLT 697.
53. In the judgment titled as Avinash Kumar Chauhan v. Vijay Krishna Mishra reported as AIR 2009 SUPREME COURT 1489 it was held:
" ... ... ... ..Section 35 of the Act, however, rules out applicability of such provision as it is categorically provided therein that a document of this nature shall not be admitted for any purpose whatsoever. If all purposes for which the document is sought to be brought in evidence are CS no: 1345/08 Page No: 21/91 excluded, we fail to see any reason as to how the document would be admissible for collateral purposes... .."
54. Adverting to the facts of the present case the said lease deeds are unstamped/ deficiently stamped documents and hence they are in admissible in evidence for any purpose whatsoever in view of the provisions of section 35 of the Indian Stamp Act and they cannot be looked into even for collateral purposes.
55. The net result is that the lease deeds cannot be read in evidence and this court would have to proceed further on the assumption that there are no lease deeds at all. If it has to be assumed that there are no written lease deeds at all then the lease in question has to be inevitably considered as an oral lease.
56. The next question to be considered is as to whether in such circumstances a permanent lease can be said to have been validly created.
57. When under section 107 of the Transfer of Property Act CS no: 1345/08 Page No: 22/91 read with section 17 of the Registration Act a lease for a period of more than one year cannot be created except by a registered lease deed the natural and necessary concomitant is that a permanent lease cannot be created except by way of a registered instrument.
58. In the judgment titled as Samir Mukherjee v. Davinder K. Bajaj reported as AIR 2001 SUPREME COURT 1696 it was held:
" ... ... .If they (parties) decide upon having a lease in respect of any immovable property from year to year or for any term exceeding one year, or reserving yearly rent, such a lease has to be only by a registered instrument. In absence of a registered instrument no valid lease from year to year or for a term exceeding one year or reserving a yearly rent can be created... .."
59. In the judgment titled as Masyc Projects Private v. Rajiv Rai Sachdev reported as 2009(6) A.D.(Delhi) 305 the Hon' ble High Court of Delhi held:
" ..5. Section 107 of the Transfer of Property Act prescribes that a lease of immovable property from year to year, or for any term exceeding one year, can be made only by a registered instrument. Leases other than CS no: 1345/08 Page No: 23/91 lease from year to year, or for any term exceeding one year can be made either by a registered instrument or by oral agreement accompanied by delivery of possession. The plaintiff itself states that there is no registered instrument. In the absence of a registered instrument, there can be no permanent lease of immovable property; such permanent lease being necessarily for a term exceeding one year. In the absence of a registered instrument, the inference is that the parties intended to make a lease from month to month... .."
60. Reference may also be made to the judgment titled as Rama Devadiga v Ganapami Karantha reported as 1962 Mys. L.J. 861: ILR 1962 Mys. 250.
61. Now let us consider the cases cited by the defendant. In the judgment titled as MCD v. Shashnak Steel Industries (P) Ltd. AIR reported as 2009 SC 967 the lessee had an express perpetual sub lease in his favour granted by the President of India and he sought to grant an expressly stated perpetual sub-lease in favour of the sub lessee. Thus the lease in that case was expressly declared to be a perpetual lease. The facts of the said case were therefore different and hence the said CS no: 1345/08 Page No: 24/91 judgment is not applicable to the facts of the present case.
62. In the judgment titled as Sivayogeswara Cotton Press, Devangere v. M. Panchaksharappa reported as AIR 1962 SC 413 the lessee was granted a lease for a period of 20 years and was expressly granted the liberty to continue the lease as long as he desired to do. This clause clearly established the creation of a permanent lease. Moreover the lease deed in question was a registered lease deed. The facts of the said case were therefore different and hence the said judgment is not applicable to the facts of the present case.
63. Similarly the judgments titled as Swami Jain Ram Chela Sarju Das Vs. Hari Singh reported as AIR 1967 Punjab 159, Bavasahed Walad Vs. West Patent Press Co. Ltd. reported as AIR 1954 Bombay 257 and A.H. Forbes Vs. L.E. Ralli reported as AIR 1925 PC 146 cited by the defendant were passed in a different set of facts and are not applicable to the facts and circumstances of the present case. They do not lay down the proposition that an unregistered lease deed can create a permanent tenancy.
CS no: 1345/08 Page No: 25/91
64. Further in the judgment titled as Hamidullah v. Abdullah reported as AIR 1972 SUPREME COURT 410 it was held:
" ....17. The mere fact that an uniform fixed rent had been paid for a long time or the fact that Haji Khuda Bux and Faqir Bux had been in possession of the land for a long time and making constructions on land at their own cost would not, in the circumstances of this case raise a presumption that the tenancies were of permanent character. In every case an inference of permanency of tenancy is a question of fact depending upon the facts of each particular case. In A. S. N. Nainapillai Marakayar v. T. A. R. A. Rm. Ramanathan Chettiar, AIR 1924 PC 65, it was ruled that the onus of proving that a tenancy is permanent is on the tenant and that the mere fact of long occupation at a fixed rent does not raise a presumption of permanent tenancy. The same view was held in Subrahmanya Chettiyar v. V. P. Subramanya Mudailyar, AIR 1929 PC 156. In Bejoy Gopal Mukharji v. Pratul Chandra Ghose, 1953 SCR 930 = (AIR 1953 SC 153), this Court said that neither possession for generations at uniform rent nor construction of permanent structures by itself is conclusive proof of permanent tenancy... .."
CS no: 1345/08 Page No: 26/91
65. In the judgment titled as Mohinder Pal Singh Khurana v. M/s Modi Alakalies & Chemicals Ltd. reported as 2010 (118) DRJ 593 it was held:
" ... ... ..Thus, unless there is a contract to the contrary/specifically saying that the Lessor has no right to terminate tenancy, the Lessor has a right to terminate any tenancy and such a right is a statutory right provided by the Transfer of Property Act itself..."
66. Thus the onus of proving that a tenancy is permanent is on the tenant. Further the mere fact that the lease is coupled with a permission to construct permanent structures is ipso facto not conclusive proof of permanent tenancy.
67. In the judgment tiled as Sivayogeswara Cotton Press, Devangere v. M. Panchaksharappa reported as AIR 1962 SC 413 it was itself held:
" ... ... .But whether it is a tenancy for life or a permanent tenancy must ultimately depend upon the terms of the contract itself. And in construing the terms of such contracts the courts must look at the substance of the matter and decide what the parties really intended to CS no: 1345/08 Page No: 27/91 do... .."
68. Thus the correct legal position is that whether the lease in question is a permanent lease or not would depend upon the facts and circumstances of a particular case. There is no scope for presumptions and assumptions when the intention of the parties can be clearly deciphered from the material on record.
69. Adverting to the facts and circumstances of the case initially there was a lease deed executed in the year 1985 for a period of 9 years and 11 months. Thereafter another lease deed was executed in the year 1995 for a period of 9 years and 11 months. These lease deeds cannot, however be read in evidence.
70. Let us therefore examine the other evidence on record. The defendant vide letter dated 01.06.2007 Ex. DW 1/23 had sought renewal of the lease deed. The said letter clearly shows that the lease in question was for a limited period and the defendant sought to renew the said lease deed. Thus the intention of the parties was never to create a permanent lease deed. Hence the plea of a permanent lease stands negated.
CS no: 1345/08 Page No: 28/91
71. At any rate there was no registered lease deed executed and hence in the absence of a registered lease deed the creation of a permanent lease is not possible. Hence I hold that the lease in question was not a permanent lease.
72. Coming to the question of renewal of the lease, there is no registered lease deed and hence the renewal clause being a term of the lease deed cannot be considered. Even the lease deeds in question contain no such stipulation for infinite number of automatic unilateral renewals.
73. In the judgment titled as State of U.P. v. Lalji Tandon reported as AIR 2004 SUPREME COURT 32 it was held:
" ... ... ... 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. Failing the execution of a fresh deed of lease, another lease for a fixed term shall not come into existence though the principal lease in spite of the expiry of the term thereof may continue by holding over for CS no: 1345/08 Page No: 29/91 year by year or month by month, as the case may be... .."
74. In the judgment titled as Caltex Ltd. V. Bhagwan Devi reported (1969) 2 SCR 238 it was held that renewal of lease is a privilege and if the tenant wishes to claim the privilege he must do so strictly within the time limited for the purpose. In this respect reference may also be made to the judgment titled as DLF Ltd. V. Emirates reported as 169 (2010) DLT 604.
75. In the judgment titled as Uptron Powertronics Ltd., M/s. v. G. L. Rawal reported as AIR 1999 DELHI 377 (DB) it was held that where the extension of a lease in the second and subsequent block of three years was not by a registered instrument it had to be regarded as a month to month tenancy.
76. DW 1 has stated in his cross examination that no lease deed came to be executed between the parties after 06.03.1995. He further stated that the defendant had sent no written communication to the plaintiff after the said letter dated 01.06.2007 (Ex. DW1/23) calling upon the plaintiff to come forward to execute the lease deed in favour of CS no: 1345/08 Page No: 30/91 the defendant. He further stated that he did not take any step for renewal of the lease.
77. Thus it cannot be said that the lessee had any unqualified right of infinite number of automatic renewals under the lease. Moreover the lessee never exercised his option of renewal in accordance with the alleged renewal clause within the stipulated period. At any rate no fresh registered leased deed was executed between the parties and hence it cannot be said that lease was actually renewed.
78. The net result is that neither the lease deeds in question were executed in perpetuity nor the lease created between the plaintiff and the defendant can be said to be a permanent lease.
79. This issue is therefore decided in favour of the plaintiff and against the defendant.
Issue No. 3
80. The question to be answered is as to whether the suit is barred in view of the provisions of Section 50 of the Delhi Rent Control CS no: 1345/08 Page No: 31/91 Act. The onus to prove this issue was upon the defendant.
81. The plaintiff has contended that what was let out was a vacant plot of land which does not qualify as a premises within the contemplation of the Delhi Rent Control Act and hence a Civil Suit for Recovery of Possession on determination of tenancy is maintainable before this Court.
82. As against this the defendant has contended that initially in the year 1985 a plot of land was let out. However thereafter in the year 1985-86, pursuant to the agreement between the parties the defendant raised a superstructure in the form of a joint and inseparable industrial building upon the demised plot as well as 3 other adjacent plots. Thereafter in the year 1995 the second lease deed was executed between the plaintiff and the defendant.
83. Counsel for the defendant has contended that at that time in the year 1995 there was an industrial building/ superstructure in existence over the demised plot and the said industrial building/ superstructure is deemed to have been vested in the land and the CS no: 1345/08 Page No: 32/91 subsequent lease deed of 1995 was in respect of both the land as well the industrial building/ superstructure. In other words the industrial building/ superstructure is deemed to have been comprised in the lease deed executed in the year 1995 and hence the lease was in respect of a building which qualifies as a premises within the contemplation of the Delhi Rent Control Act. In these circumstances and in view of the fact that the rent of the demised property is less than Rs. 3500/- per month the defendant has contended that the Delhi Rent Control Act applies to the suit property and the defendant is entitled to protection of the same. Hence the suit is barred by the provisions of section 50 of the Delhi Rent Control Act.
84. The prime question therefore to be answered is as to whether the suit property is a premises within the meaning and contemplation of the Delhi Rent Control Act.
85. Section 2 (i) of the Delhi Rent Control Act defines " premises " as under:
" ............... "premises" means any building or part of a building which is, or is intended to be, let separately for use as a residence or for CS no: 1345/08 Page No: 33/91 commercial use or for any other purpose, and includes.-
(i) the garden, grounds and outhouses, if any, appertaining to such building or part of the building;
(ii) any furniture supplied by the landlord for use in such building or par of the building;
but does not include a room in a hotel or lodging house;........"
86. It is not in dispute that initially at the time of inception of the lease in the year 1985 a vacant plot of land was let out to the defendant.
87. I have already held that the lease deeds dated 1985 and 1995 were unregistered lease deeds and therefore they cannot be read in evidence. No reference can be made to the said lease deeds for determining the terms and conditions of letting. It cannot therefore be said that the first lease was for a period of 9 years and 11 months and it ended on 05.03.1995. Similarly it cannot be said that the second lease deed was for a period of 9 years and 11 months commencing on 06.03.1995.
CS no: 1345/08 Page No: 34/91
88. The lease in question therefore has to be considered as a periodic lease (month to month) in terms of section 106 of the Transfer of Property Act.
89. Thus the lease deeds cannot be considered at all. There is no other evidence to suggest that the original tenancy was terminated in the year 1995, possession was delivered back to the landlord and thereafter a fresh tenancy was created in the year 1995.
90. Thus the inevitable conclusion is that the lease in question was a continuous tenancy commencing from 06.04.1985 and continuing till it was allegedly determined vide legal notice dated 10.03.2008. Thus the contention of the defendant that when the second lease deed was executed there was a superstructure in existence which is deemed to have been comprised in the second lease is not tenable.
91. Counsel for the defendant has also referred to the following passage from the judgment titled as Builders Association of India v. Union of India reported as AIR 1989 SC 1371:
" .....The well-known rule is that the property in all materials and fittings, CS no: 1345/08 Page No: 35/91 once incorporated in or affixed to a building, will pass to the free holder
- quicquid plantatur solo, solo cedit. The employer under a building contract may not necessarily be the free holder, but may be a lessee or licensee, or even have no interest in the land at all, as in the case of a sub-contract. But once the builder has affixed materials, the property in them passes from him, and at least as against him they become the absolute property of his employer....."
92. First of all the aforesaid passage is from Hudson's Building Contracts (8th edition) which was referred to by the Hon'ble Supreme Court in the aforesaid judgment and not the legal principle crystallized by the Hon'ble Supreme Court itself. The said passage quoted by the Hon'ble Supreme Court verbatim does not ipso facto become the law declared by the Hon'ble Supreme Court in terms of Article 141 of the Constitution of India.
93. Secondly it is well settled that what is binding in a judgment is its ratio decidendi which is the principle found out upon a reading of a judgment as a whole, in the light of the questions and the facts before the Court. A judgment of the Court has to be read in the CS no: 1345/08 Page No: 36/91 context of questions which arose for consideration in the case in which the judgment was delivered. Thus any observation in a judgment has to be read and understood in the context of facts of that particular case in respect of which such observation has been made. Reference may be made to the judgments tiled as "Director of Settlements, A. P. v. M. R. Apparao" reported as AIR 2002 SUPREME COURT 1598 and "Municipal Corporation of Greater Bombay v.Thukral Anjali Deokumar" reported as AIR 1989 SUPREME COURT 1194 in this respect.
94. In the judgment titled as State Financial Corporation v. Jagdamba Oil Mills reported as AIR 2002 SC 834 the Hon'ble Supreme Court Held:
" .......22.The following words of Lord Denning in the matter of applying precedents have become locus classicus:
"Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect. In deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo) by matching the colour CS no: 1345/08 Page No: 37/91 of one case against the colour of another. To decide, therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive." xxx xxx xxx "Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path to justice clear of obstructions which could impede it." ... ...."
95. In the judgment titled as Ashwani Kumar Singh vs U.P. Public Service Commission reported as AIR 2003 SC 2661 it was held:
" .........Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are not to be read as Euclid's theorems nor as provisions of the statute. These observations must be read in the context in which they appear............13. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper......"
CS no: 1345/08 Page No: 38/91
96. The facts of the said case i.e. Builders Association of India v. Union of India reported as AIR 1989 SC 1371 were entirely different. The Hon'ble Supreme Court was dealing with the issue regarding imposition of sales tax on the sale or purchase of goods which includes among other things a tax on the transfer of property in the goods (whether as goods or in some other form) involved in the execution of a works contract. The principle laid down by the Hon'ble Supreme Court in para 36 of the said judgment is that ordinarily, unless there is a contract to the contrary, in the case of a works contract the property in the goods used in the construction of a building passes to the owner of the land on which the building is constructed, when the goods or materials used are incorporated in the building.
97. The Hon'ble Supreme Court was not dealing with a case where a lessee of vacant land had constructed a superstructure thereon. In the present case we do not have any issue regarding passing of property in the building material in case of a Works Contract. The said judgment is therefore not applicable to the facts and circumstances of the present case.
CS no: 1345/08 Page No: 39/91
98. Thirdly the said judgment does not deal with section 108(h) of the Transfer of Property Act which circumscribes the legal position applicable to the facts of the present case.
99. Next the counsel for the defendant has again referred to and relied upon the following illustration quoted from Emden and Watson - Building Contracts and Practice (6th Edition) in para 37 of the said judgment (AIR 1989 SC 1371).
" .....Illustration: Where the yearly tenant of a house had, at his own expense during his term, hung bells but quit the premises without removing them - Held: By remaining fixed to the freehold after the expiration of the term they became the property of the landlord...."
100. This illustration in fact supports the version of the plaintiff which is in consonance with section 108(h) of the Transfer of Property Act. Thus the superstructure would vest in the landlord only when the tenant quits the demised property after expiry of the lease. Admittedly the defendant has not handed over the possession of the suit property to the plaintiff and hence the superstructure does not vest in the plaintiff as on date.
CS no: 1345/08 Page No: 40/91
101. Counsel for the defendant has also referred to section 108(p) and 108(d) of the Transfer of Property Act to contend that the superstructure is deemed to have been comprised in the lease and the superstructure would vest in the landlord.
102. Section 108(d) of the Transfer of Property Act provides that if during the continuance of the lease any accession is made to the property, such accession (subject to the law relating to alluvion for the time being in force) shall be deemed to be comprised in the lease. This provision has no application to the facts and circumstances of the case. This provision comes into operation where any encroachment is made by the lessee (eg. of any adjacent land) whereupon such encroachment would be deemed to be the property of the lessor and not of the lessee.
103. Further more section 108 of the Transfer of Property Act is subject to any Contract to the contrary. Adverting to the factual position the evidence on record clearly shows that the defendant has been claiming himself to be the owner of the superstructure. If the defendant is the owner of the superstructure it cannot be said that the superstructure CS no: 1345/08 Page No: 41/91 has been leased out to the defendant.
104. Let us examine the material on record in this respect. In the written statement it has been unequivocally averred by the defendant that the defendant is the owner of the superstructure/ industrial building constructed upon the suit plot.
105. DW 1 has also unequivocally admitted in his cross examination that the superstructure is owned by the defendant. DW 1 further stated that the defendant had raised the superstructure on the suit plot after obtaining the suit plot on rent from the plaintiff and the superstructure is owned by the defendant. DW 1 further stated that the plaintiff company has no right, title or interest in the superstructure. He further stated that when the suit plot was let out in the year 1985 the defendants were permitted by the plaintiff to raise the superstructure thereon at their own costs, risk and responsibilities.
106. Thus the argument now being raised by the Counsel for the defendant is not only contrary to the pleadings of the defendant but also de hors the evidence of the defendant.
CS no: 1345/08 Page No: 42/91
107. Further section 108(p) of the Transfer of Property Act provides that the lessee must not, without the lessor's consent, erect on the property any permanent structure, except for agricultural purposes. This provision again has no application to the facts of the present case since admittedly the defendant/ lessee ,constructed the building on the demised plot with the consent of the lessor/ plaintiff. In fact in view of section 108(p) of the Transfer of Property Act the defendant could not have raised any permanent superstructure but for the permission accorded by the plaintiff.
108. Next the counsel for the defendant has emphatically placed reliance upon the judgment titled as Dossibai N. B. Jeejeebhoy v. Khemchand Gorumal reported as AIR 1966 SC 1939. He has contended that the land let out in the present case with a covenant for construction of a superstructure would amount to a demise of the superstructure and thus the suit property would constitute premises within the contemplation of the rent legislation. He has specifically referred to the following passage from the said judgment:
" .........The more substantial question for the consideration is whether CS no: 1345/08 Page No: 43/91 when open land is being leased not to be used for residence in its condition of open land but to be used for the purpose of residence after constructing buildings thereon, the letting of the open land can reasonably be called to be letting for residence.........The premises let are therefore "premises" to which under S. 6 (1) of the Rent Act the provisions of Part II of the Act, apply........."
109. Counsel for the defendant has further contended that the judgment titled as Dossibai N. B. Jeejeebhoy v. Khemchand Gorumal reported as AIR 1966 SC 1939 was rendered by a bench of 3 judges and therefore the same would have to be followed to the exclusion of any other 2 judge bench decision. He also placed reliance on the judgments titled as Subhadra v. Narsaji Chenaji Marwadi reported as AIR 1966 SC 806 and Govinda Naik v. West Patent Press Co. reported as AIR 1980 Karnataka 95 (FB).
110. It is well settled that other statutes may serve as external aids for interpretation of a particular legal provision. However another statute can be used in interpreting the statute under consideration only when the two statutes are similar. The interpretation given to a particular CS no: 1345/08 Page No: 44/91 expression in another statute can have no bearing on the interpretation of the expression under consideration when the definition in both the statutes is different. Reference may be made to the judgment titled as M/s. Park Leather Industry (P) Ltd. v. State of U.P. Reported as 2001(3) SCC 135 in this respect.
111. As far as the present case is concerned the Section 2 (i) of the Delhi Rent Control Act defines " premises" in clear terms. In the judgment titled as Dossibai N. B. Jeejeebhoy v. Khemchand Gorumal reported as AIR 1966 SC 1939 (relied upon by the defendant) the Hon'ble Supreme Court was dealing with the Bombay Rents, Hotel and lodging House Rates Control Act, 1947. Section 5(8) of the Bombay Rents, Hotel and lodging House Rates Control Act, 1947 defines premises and premises under the said Act inter alia means- (a) any land not being used for agricultural purposes. Section 6(1) of the Bombay Rents, Hotel and lodging House Rates Control Act, 1947 provides that in the areas specified in Schedule I, this Part shall apply to premises let for residence, education, business, trade or storage.
112. Thus the definition of premises under the Bombay Rents, CS no: 1345/08 Page No: 45/91 Hotel and lodging House Rates Control Act, 1947 is different from the Delhi Rent Control Act in as much as land (used for non agricultural purposes) itself constitutes premises under the Bombay Act. In fact the question before the Hon'ble Supreme Court in the said case was not whether the superstructure built by the tenant would constitute premises where only a vacant plot was leased out as there was no dispute that land itself would constitute premises. The question was as to whether the premises was let out for residence, education, business, trade or storage in terms of section 6(1) of the Bombay Act. Thus the said judgment is not applicable to the present case.
113. For similar reasons the judgment titled as Govinda Naik v. West Patent Press Co. reported as AIR 1980 Karnataka 95 (FB) is not applicable as under section 3(n) of the Karnataka Rent Control Act premises inter alia means any land not used for agricultural purposes.
114. Further more the said judgment of the Karnataka High Court runs counter to the judgment titled as Subhadra v. Narsaji Chenaji Marwadi reported as AIR 1966 SUPREME COURT 806 which in facts goes against the defendant. In the judgment titled as CS no: 1345/08 Page No: 46/91 Subhadra v. Narsaji Chenaji Marwadi reported as AIR 1966 SUPREME COURT 806 it was held that the material date for ascertaining whether the plot is "premises" for purposes of S. 6 is the date of letting and not the date on which the application for fixation of standard rent is made by the tenant or the landlord. This only supports the version of the plaintiff.
115. Adverting to the facts of the present case the plot of land was let out on 06.04.1985 and therefore subsequent construction of the superstructure cannot have any bearing on the question as what was let out on the date of letting was only a vacant plot. Hence the subject matter of the lease was a plot of land only and not premises.
116. Now in the judgment titled as Kamla Devi vs Laxmi Devi reported as 2000(5) S.C.C. 646 which was case on the Delhi Rent Control Act only it was held:
" ...........11. When, in any case, the question arises whether an open plot of land or a plot of land with structures thereon, was let out, the Court has to determine the same on the facts of that case. In deciding this question, it will be useful to bear in mind that if the plot with structure CS no: 1345/08 Page No: 47/91 was let out in will fall within the meaning of the `premises' but if open plot without any structure was let out then it does not fall within the meaning of the term `premises'. It is immaterial whether the tenant raised structures before the creation of the tenancy or after he was let in as a tenant. In either case, the tenant alone will have the proprietary rights in the structure and not the landlord......" .
117. It was further held:
" ........16. That decision was followed by this Court in A.R. Salay Mohamed Sait, etc. Vs. Jaffer Mohamed Saits Memorial Dispensary Charity and Ors. [1969 RCR (Rent) (SC) 322]. There, the lessee constructed building and a shed on the land leased out to him. The question was: whether the land leased out came within the meaning of building in Section 2, clause (2) of the Madras Buildings (Lease and Rent Control) Act, 1960, (for short, the Madras Act)? The defendant contested the suit, inter alia, on the ground that the suit was barred under the provisions of the Madras Act as the civil court had no jurisdiction to entertain the suit for eviction in respect of building covered by the Madras Act. The definition of the term building in Section 2, clause (2) of the Madras Act was in haec verba with the definition in the Delhi Act.
CS no: 1345/08 Page No: 48/91 It was held that in determining the question whether the lease was of a vacant land or a building within the meaning of the Madras Act the court must take into account both form and substance of the transaction; the landlord was aware that there were certain structures on land but what was let out was not the structures but the land. Consequently, the appeal of the tenant was dismissed on the ground that the Madras Act was not applicable and the suit was maintainable in the civil court....." [Kamla Devi vs Laxmi Devi].
118. In the judgment titled as Krishnapasuba Rao Kundapur v. Dattatraya Krishnaji Karani reported as AIR 1966 SUPREME COURT 1024 it was held:
" ...........On a plain reading of the lease, it is clear that the subject-matter of the letting was open land and the rent was payable in respect of the open land only and not in respect of the structures raised by defendant No. 1. We were referred to decisions in respect of building leases. It is a question of construction of a building lease whether the lease is a demise of the land only, or whether it is a demise of the land together with the building to be constructed by the tenant......."
" ........The building on the land was constructed by the tenant at this own CS no: 1345/08 Page No: 49/91 cost before the execution of the rent note. The building belonged to the tenant and was not the subject-matter of the letting. The land only was the subject-matter of the letting. Consequently, the premises are land within the meaning of S. 13(1)(i).........."
119. In the judgment titled as Ram Prakash Chawla vs Amril Kaur reported as 20 (1981) DLT 145 it was held:
" ........5. As already observed the definition of 'premises' as given in the Delhi Rent Control Act, 1958 shows that it means any building or part of a building which is, or is intended to be, let separately for its use. Two essential conditions, therefore, follow from it. One is premises must consist of a building or a part of a building and second they must be let or intended to be let for a purpose. In the instant case before me there was no building at the time of letting. Morever, there was never any intention on the part of the respondent to let any structure at any time to the appellant. In Sh. Gobind Sahai vs. Narain Dass etc. R. S. A. No. 240 of 1967 decided on 7-9-1971 this Court held that the land bounded by walls and covered by a roof and capable of being used for a useful purpose is normally a building. It has further been held that the erection of superstructures by a tenant after the letting is irrelevant for CS no: 1345/08 Page No: 50/91 determination of the question as to whether what had been let out by the landlord constitutes premises within the meaning of Section 2 of the Delhi Rent Control Act, 1958......"
120. Reference may also be made to the judgments titled as Sobha Singh vs Sant Dass reported as 35 (1988) DLT 341, Vinod Nagpal v. Bakshi S. Kuljas Rai reported as 37 (1989) DLT 278 and Umika Agencies vs Suresh Tanwar reported as 1993 (2) RCR 602. Tese judgments clearly show that when only a plot of land was let out the subsequent construction of a superstructure would not alter the subject of letting and the lease would not construed to be in respect of a premises. Hence the Rent Control legislation would not be applicable.
121. Now let us consider what section 108(h) of the Transfer of Property Act postulates. Section 108(h) of the Transfer of Property Act provides that the lessee may even after the determination of the lease remove, at any time whilst he is in possession of the property leased but not afterwards all things which he has attached to the earth; provided he leaves the property in the state in which he received it.
CS no: 1345/08 Page No: 51/91
122. In the judgment titled as "K. A. Dhairyawan, Dr. v. J. R. Thakur" reported as AIR 1958 SUPREME COURT 789 it was held:
" ..........7. Normally, under S. 108 of the Transfer of Property Act, before the expiry of the lease, a lessee can remove all structures and buildings erected by him on the demised land. All that was necessary for him to do was to give back the land to the lessor, on the termination of the lease, in the same condition as he found it. The ownership therefore, of the building in this case was not with the lessors but was with the lessees. Under S. 108 of the Transfer of Property Act there was nothing to prevent the lessees contracting to hand over any building or structure erected on the land by them to the lessors without receiving any compensation. In other words, although under S. 108 the lessees had the right to remove the building, by the contract they had agreed to hand over the same to the lessors without the right to receive compensation at the end of the lease, the matter being entirely one of contract between the parties. Such a contract, however did not transfer the ownership in the building to the lessors while the lease subsisted......"
123. In the judgment titled as Jagat Ram Sethi v. Rai Bahadur D. D. Jain reported as AIR 1972 SUPREME COURT 1727 it was CS no: 1345/08 Page No: 52/91 held:
" .........Under S. 108 (h) of the Transfer of Property Act the lessee could, after determination of the lease remove while in possession the construction made by him but if he failed to do so and the property reverted to the lessor the fixtures etc. would become the property of the latter. Since Mistri Ibrahim did not put the landlord in possession and transferred the land together with the structure put up by him to the appellant the transferee stepped into the shoes of the lessee. Thus so far as the appellant and Harbans Lal were concerned the former was tenant only of the land and no accommodation had been rented out to him by the latter. As such the provisions of S. 3 of the Act would not be attracted. The High Court also considered this point and expressed the opinion that the structures never became the property of the landlord....."
" .......The lessee had the right under S. 108 (h) of the Transfer of Property Act to remove the constructions while he was in possession. There was no provision in that Act which debarred the lessor from determining the lease under S. 111 merely because constructions had been made by the lessee even to the knowledge of the lessor, and from instituting the suit for ejectment......"
CS no: 1345/08 Page No: 53/91
124. Thus the the right of a tenant who had put up a superstructure on a lease hold land which was taken on a terminable lease, will be only to remove the superstructure at the time of delivery of possession on the termination of the lease. There would also be no right to compel the landlord, unless the latter agrees to do so, to pay compensation for unwanted superstructure. Reference may also be made to the judgments titled as Shree Sidhi Budhi Vnayakagar v. V. Marimuthu reported as AIR 1963 Madras 369 (DB) and Shrimant Sardar Virendrasingh v. Manohar reported as 2005(2) R.C.R.(Civil)
306.
125. Adverting to the facts of the present case DW 1 categorically admitted in his cross examination that the building/superstructure on the suit plot neither came into the possession nor ownership of the plaintiff. He further stated that the defendant knew as to what was being let out and what was being taken on rent at the time of execution of the lease in its favour in the year 1985 and even thereafter. The lease deeds also stipulate that only the land was let out. The parties were also well aware of this fact and intended that only the land was to be let out. That is why DW 1 has unequivocally admitted CS no: 1345/08 Page No: 54/91 that the defendant is the owner of the superstructure. There is nothing unlawful if the parties were ad idem on the issue that only land was being let out.
126. I therefore hold that what was let out under the lease was only the land and not the superstructure. Thus the suit plot does not constitute premises within the contemplation of the Delhi Rent Control Act and hence the suit is not barred by section 50 of the Delhi Rent Control Act.
Issues No. 2 and 5
127. The questions to be answered are as to whether the tenancy of the defendant has been duly terminated and whether the plaintiff is entitled to recover the possession of the suit plot.
128. PW-1 deposed that vide an unregistered lease deed dated 06.04.1985 followed by another similar unregistered lease deed dated 06.03.1995, the defendant had taken on lease from the plaintiff the suit plot at a rent of Rs. 237.49 per month. The suit plot has been shown in red colour in the site plan Ex. PW1/3. PW-1 further deposed that the CS no: 1345/08 Page No: 55/91 tenancy was a month to month tenancy commencing from the 06th day of each English calendar month and ending on the 5th day of the succeeding month.
129. PW-1 further deposed that the plaintiff company had served a legal notice dated 10.03.2008 upon the defendant thereby terminating the tenancy of the defendant qua the suit plot and calling upon the defendant to remove the superstructure constructed thereupon and to vacate and hand over the possession of the suit plot to the plaintiff on expiry of the period stipulated in the said legal notice. A copy of the said legal notice is Ex. PW1/4. The U.P.C. receipt and postal receipt are Ex. PW1/5 and Ex. PW1/6. The duly signed AD card is Ex. PW1/7.
130. The first question raised by the counsel for the defendant is whether PW 1 was competent to depose in the present case.
131. PW-1 has deposed that he had been in the employment of the plaintiff company from 1944 till he retired on attaining the age of superannuation in the year 1987 as an accountant and he had been looking after and attending to all tenancy related matters on behalf of the CS no: 1345/08 Page No: 56/91 plaintiff company. He further deposed that even after his retirement he has been continuing to discharge the same duties and functions as before except that his status in the plaintiff company has changed from that of an employee to that of a consultant and he is personally and fully conversant with the facts and circumstances of the present case and is able and competent to depose about the same.
132. Counsel for the defendant has however contended that there was no written authorization/ board resolution/ power of attorney in favour of PW 1 to depose in the present case. PW 1 also conceded that Sh. Padam Pat Mody, Chairman had orally asked him to appear as a witness in this case.
133. However no legal provision has been brought to the notice of this court where under a witness must produce a written authorization for deposing in the court. An employee of a company requires authorization to institute a suit. But any person who is aware of the facts of the case may testify as a witness. A witness who deposes on the basis of the record available with the company also needs no specific written authorization. His authority may be inferred from the facts and CS no: 1345/08 Page No: 57/91 circumstances of the given case.
134. The authority of PW 1 to depose in the present case can be inferred from the fact that he produced the original minutes book of the company. Most importantly PW 1 stated in his cross examination that the letter dated 01.06.2007 (issued by the defendant) was received by the plaintiff company and the AD card bears the signatures of PW 1 and the same was thereafter exhibited as Ex. PW1/DX2. This clearly shows that PW 1 was working with the plaintiff company and was also dealing with tenancy related matters and that is why the said letter was received by him.
135. Counsel for the defendant has argued that PW 1 was not aware of the facts of the case since PW 1 stated in his cross examination that he has not given any instructions to the counsel for the plaintiff to file the suit. He further stated that he did not give instructions to the counsel for the plaintiff to issue the legal notice. This however does not show that he was not aware of the facts of the case. He answered correctly in as much as the instructions for filing the suit and issuing the notice were not given by PW 1. But that does not mean that he was not CS no: 1345/08 Page No: 58/91 aware that these instructions were validly given on behalf of the plaintiff company. He unequivocally asserted each and every fact in his examination in chief and in his cross examination.
136. PW 1 categorically stated the names of various Directors of the plaintiff company in his cross examination. He further stated that Sh. Padam Pat Mody was the Director of the plaintiff company who was also the Chairman of the said meeting dated 11.02.2008 when Sh. Ajay Maheshwari was authorized to institute the suit. Even DW 1 also stated in his cross examination that Mr. Mody was one of the directors of the plaintiff company. Thus I have no reason to believe that PW 1 was not authorised to depose before the court or was not having knowledge of the facts. The entire testimony of PW 1 when read cumulatively shows that he was well aware of the facts and circumstances of the case.
137. Counsel for the defendant has further referred to the judgments titled as Man Kaur v. Hartar Singh Sangha reported as 2010 (10) SCC 512 and Janki Vashdeo Bhojwani Vs Indu Sind Bank reported as AIR 2005 SC 439 to contend that PW 1 was not competent to depose.
There is no dispute about the legal proposition formulated in the said CS no: 1345/08 Page No: 59/91 judgments that an attorney holder cannot depose on behalf of the principal for the acts done by the principal or in respect of transactions of which the principal alone has personal knowledge. However the said judgments were passed in cases where the principal was an individual. The said judgments would have no application where a suit is filed on behalf of a company as obviously a company would adduce evidence only through its officials who have personal knowledge of the facts or depose on the basis of the record. Thus the said judgments are not applicable to the facts and circumstances of the present case.
138. Coming to the basic issue, the relationship of landlord and tenant between the parties is not disputed. I have already held that the lease in question was not a permanent lease and the suit is not barred by the provisions of the Delhi Rent Control Act. The plaintiff has contended that the tenancy of the defendant stood terminated w.e.f. the expiry of 15 days from the date of receipt of the said legal notice Ex. PW 1/4. The defendant has not vacated the suit plot despite service of the said legal notice.
139. The defendant has first of all disputed the service of the CS no: 1345/08 Page No: 60/91 legal notice. The defendant has contended that the said legal notice dated 10.03.2008 was not served on the defendant. The defendant has further disputed the signatures on the AD card. Counsel for the defendant has reiterated that PW 1 has stated in his cross examination that the legal notice was not sent under his instructions.
140. However PW 1 has categorically deposed in his examination-in-chief that the plaintiff company had got served the legal notice Ex. PW 1/4 upon the defendant. PW-1 was therefore, well aware that the legal notice was issued by the plaintiff company. It is not necessary that whatever, was done on behalf of the plaintiff company should have been done on the instructions of PW-1 only. All actions of a company have to be undertaken through different individuals. No question was put to PW-1 that the legal notice was not sent under the instructions of any of the directors/principal officers of the plaintiff company. No other suggestion was given to PW-1 or question was put to PW 1 which shows that the legal notice was not validly issued on behalf of the plaintiff company. I am therefore, of the opinion that the plaintiff had duly issued the legal notice dated 10.03.2008 to the defendant terminating the tenancy of the defendant.
CS no: 1345/08 Page No: 61/91
141. The next contention raised by the counsel for the defendant is that since the lease was for industrial purposes, the same is to be deemed as a lease from year to year terminable by a six months' notice only and since the notice issued by the plaintiff was merely a fifteen days' notice, therefore the said notice was not in accordance with the provisions of section 106 of the Transfer of Property Act.
142. I have already held that there being no registered lease deed the tenancy cannot be said to be for period of more than one year. In the judgment titled as Samir Mukherjee v. Davinder K. Bajaj reported as AIR 2001 SUPREME COURT 1696 it was held:
" ..........7. In the case in hand we are concerned with an oral lease which is hit by the first paragraph of Section 107 of the Transfer of Property Act. Under Section 107 parties have an option to enter into a lease in respect of an immovable property either for a term less than a year or from year to year, for any term exceeding one year or reserving a yearly rent. If they decide upon having a lease in respect of any immovable property from year to year or for any term exceeding one year, or reserving yearly rent, such a lease has to be only by a registered CS no: 1345/08 Page No: 62/91 instrument. In absence of a registered instrument no valid lease from year to year or for a term exceeding one year or reserving a yearly rent can be created. If the lease is not a valid lease within the meaning of the opening words of Section 106 the rule of construction embodied therein would not be attracted. The above is the legal position on a harmonious reading of both the sections................."
" .........10. In the present case though the appellant has claimed that it was a lease for manufacturing purpose, admittedly there was no registered written lease. Therefore, rule of construction as envisaged in Section 106 would not be applicable as the statutory requirement of Section 107 of the Act has not been satisfied. The plea of the appellant that 15 days notice terminating the present tenancy is bad in law would not be sustainable........."
143. In the judgment titled as "Jagat Taran Berry v. Sardar Sant Singh" reported as AIR 1980 DELHI 7 it was hled:
" .........18. Under S.107 the parties have an option. They can negotiate a lease of a duration mentioned in the first paragraph. If they decide upon such a lease, they must execute a registered instrument. Alternatively, they can decide to have a lease for a shorter period. In that event they CS no: 1345/08 Page No: 63/91 can create the lease with or without executing a registered instrument. Whenever, a lease is created without a registered instrument the inevitable conclusion must be that the parties; have, so to speak, opted out of the first paragraph. They have negatived any intention of creating a lease of the duration therein mentioned. Or, to put it in positive form, they have agreed upon a lease of a duration coming within the second paragraph. This is, or must be deemed to be a conscious decision on their part. It is therefore, indicative of a contract between them. That contract is that the lease will not be of a duration mentioned in the first paragraph of S.107. Such a contract will always be a 'contract to the contrary' envisaged by the opening words of S.106. The Supreme Court has said that a 'contract to the contrary' can be implied, and need not be express. So, from the single fact that a registered instrument is not executed, one can, and should, immediately deduce a contract to create a lease of the kind that can be created without such an instrument. Thus, if the lease is for 'agricultural or manufacturing purposes' and there is no registered instrument, that fact itself is conclusive to establish a 'contract to the contrary'. Considering that it was always open to the parties to execute a registered instrument but they chose not to do so, this inference accords with their intention, whether actual or ascribed.
CS no: 1345/08 Page No: 64/91
19. On this line of reasoning there never can be a conflict between S.106 and S.107. For, whenever according to S.106 a lease is deemed to exist which could only be created by registered instrument according to S.107, the nonexistence of a registered instrument will of itself invoke the opening words of S.106 by implying a contract to the contrary. Thus, the two Sections become fully reconciled......
21. In the present case there is no registered instrument. No doubt, under S.106, the fact that the lease was granted for a manufacturing purpose leads to the conclusion that the lease was from 'year to year'. But, the other fact that there is no registered instrument implies a contract to the contrary, which must prevail. The ultimate conclusion is that the tenancy was from 'month to month'. Hence, the notice to quit served on the tenant was valid......"
144. Thus the result is that in the present case there being no registered lease deed the existence of a lease from year to year is ruled out. The inevitable conclusion is that the tenancy in question was month to month tenancy. This conclusion is reinforced on account of the fact that monthly rate of rent was prescribed. Thus the lease was determinable by 15 days' notice.
CS no: 1345/08 Page No: 65/91
145. The question that now remains to be answered is as to whether the legal notice was duly served upon the defendant or not.
146. Section 106 of the Transfer of Property Act provides that the tenancy can be terminated by fifteen days' notice and the stipulated period of 15 days shall commence from the date of receipt of the notice. Section 106 of the Transfer of Property Act further provides that the notice may be sent to the addressee by post.
147. The legal requirement under section 106 is that such a No- tice may be sent by post to the party who is intended to be bound by it. Now under section 106 of the Transfer of Property Act all that a landlord can do to comply with this provision is to post a prepaid registered letter bearing the tenant's correct address. If not received back, then under S. 27 of the General Clauses Act, it is presumed to have been delivered to the addressee. If the addressee accepts it there is no problem at all. If the addressee declines to accept it then refusal can be treated as a deemed service. However the difficulty arises it gets returned to the sender with vague endorsements such as "not found", "not in station", " not available CS no: 1345/08 Page No: 66/91 despite intimation" and so on. There is nothing else which the landlord can do to ensure that the notice is actually served on the addressee ten- ant. Once the registered letter containing the notice is handed over to the post office the landlord has no control over it. Therefore if a registered letter properly addressed to a person at his correct residential address does not get served in the normal course and is returned it can only be attributed to the addressee's own conduct. Thus where such a letter is re- ceived back unserved and from the facts and circumstances it appears that the addressee is deliberately avoiding service, the letter/Notice can be deemed to be constructively served on the addressee.
148. In this context reference may also be made to the judgment of the Honble supreme Court in AIR 1989 SUPREME COURT 630 ti- tled "Madan and Co. M/s. v. Wazir Jaivir Chand" wherein it was held:
" ......In this situation, we have to chose the more reasonable, ef - fective, equitable and practical interpretation and that would be to read the word "served" as "sent by post", correctly and properly addressed to the tenant, and the word "receipt" as the tender of the letter by the postal peon at the address mentioned in the letter. No other interpretation, we CS no: 1345/08 Page No: 67/91 think, will fit the situation as it is simply not possible for a landlord to ensure that a registered letter sent by him gets served on, or is received by, the tenant......" [Para 6]
149. Adverting to the facts of the present case, AD card has been received back with signatures. DW 1 has admitted in his cross ex- amination that the address of the defendant on Ex. PW1/4 to Ex. PW1/7 is correct. There is nothing on record to show that the said legal notice was not received by the defendant. Thus the necessary conclusion is that the legal notice was duly served.
150. Further the expression used in section 106 of the Transfer of Property Act is by post and not by registered post. There is nothing in the plain language of the section, which renders service of the Notice sent Under Certificate of posting as invalid. Since the said legal notice dated 10.03.2008 was also sent to the defendant under Certificate of posting, the said notice is deemed to have been served on the defendant by UPC also in the ordinary course. Reference may be made to the judg- ment titled as O.P. Bahal vs. A.K. Shroff reported as 1973 RLR Note
17.
CS no: 1345/08 Page No: 68/91
151. No other infirmity has been pointed out by the defendant in the said Notice dated 10.03.2008. It is also clear that an objection as to invalidity or infirmity of notice under Section 106 of the Transfer of Property Act should be raised specifically and at the earliest; else it will be deemed to have been waived, even if there exists one. Reference may be made to the judgment of the Hon' ble Supreme Court in Parwati Bai v. Radhika reported as (2003) 12 SCC 551 in this context.
152. In these facts and circumstances, the plaintiff has satisfactorily proved that the legal notice dated 10.03.2008 was duly served upon the defendant. The said Notice is in accordance with the provisions of Section 106 of the Transfer of Property Act. I therefore hold that the tenancy of the defendant has been duly terminated in accordance with the provisions of Section 106 of Transfer of Property Act with effect from the expiry of 15 days' period from the date of receipt of legal notice and thereafter the possession of the defendant in the suit plot has become unauthorized and illegal.
CS no: 1345/08 Page No: 69/91
153. Even otherwise it has been held by the Hon'ble High Court of Delhi in the judgment titled as Jeevan Diesels & Electricals Ltd. Vs. Jasbir Singh Chadha (HUF) reported as 183 (2011) DLT 712 that :
" ....... 7 (ii). The Supreme Court in the case of Nopany Investments (P) Ltd. Vs. Santokh Singh (HUF), 146 (2008) DLT 217 (SC)=1 (2008) SLT 195=2008 (2) SCC 728 has held that the tenancy would stand terminated under the general law on filing of a suit for eviction. Accordingly, in view of the decision in the case of Nopany (Supra) I hold that even assuming the notice termination tenancy was not served upon the appellant (though it has been served and as held by me above) the tenancy would stand terminated on filing of the subject suit against the appellant/defendant.
... .....(iv) ........Once the summons in the suit along with documents were served upon the appellant/tenant, the appellant/tenant would obviously have received such notice. Even if we take this date when the appellant/tenant received a copy of the notice when served with the documents in the suit, once again, the period of 15 days has expired thereafter and keeping the legislative intendment of amended Section 106 in view, the appellant therefore, cannot argue that the tenancy is not terminated and he did not get a period of 15 days to vacate the premises.
CS no: 1345/08 Page No: 70/91 I am in view of this position consequently entitled to take notice of subsequent events under Order 7 Rule 7, CPC, and taking notice of the subsequent events of the expiry of 15 days after receipt of a copy of the notice along with documents in the suit, I hold that the tenancy has been validly terminated, and as on date, he appellant/tenant has no right to stay in the premises and consequently the decree for possession was rightly passed by the trial Court.
8. Therefore, looking at it from any point i.e. the fact that legal notice termination tenancy was in fact served, the suit plaint itself can be taken as a notice terminating tenancy or that the copy of the notice along with documents was duly served to the appellant/tenant way back in the year 2007, I hold that the tenancy of the appellant/tenant stands terminated and the appellant/tenant is liable to hand over the possession of the tenanted premises.................."
154. In view of the aforesaid judgments the result is that the tenancy of the defendant stood terminated at any rate on service of summons in the present suit although I have already held that the tenancy stood terminated with effect from the expiry of 15 days' period from the date of receipt of legal notice.
CS no: 1345/08 Page No: 71/91
155. On termination of tenancy the status of the defendant has been reduced to that of an unauthorized occupant. Since, the possession of the defendant in the suit premises has become illegal and unauthorized on account of termination of tenancy the plaintiff is entitled to recover possession of the suit plot. I therefore hold that the plaintiff is entitled to recover the possession of the suit plot.
156. I have already held that in terms of section 108 (h) of the Transfer of Property Act the defendant/ lessee is at liberty to remove the superstructure at any time before delivery of possession. In case the lessee fails to do so the superstructure would become a part of the suit plot on vacation of premises. The defendant is however not entitled to any compensation for the same. Reference may be made to the judgments titled as Shree Sidhi Budhi Vnayakagar v. V. Marimuthu reported as AIR 1963 Madras 369 (DB) and Shrimant Sardar Virendrasingh v. Manohar reported as 2005(2) R.C.R.(Civil) 306.
157. The suit plot is a well identified plot of land shown in the site plan Ex. PW 1/3. It is not possible to hold that the the suit plot has CS no: 1345/08 Page No: 72/91 lost its identity on account of construction of the superstructure. It cannot also be said that it is not possible to recover the possession of the suit plot. Whatever superstructure exists upon the suit plot in whatever manner or condition, irrespective of the fact whether it is constructed on the suit plot alone or jointly on different plots, the defendant would have to remove the said superstructure by demolishing the building or otherwise and handover the possession of the vacant plot to the plaintiff failing which the superstructure would pass on to the plaintiff along with the suit plot.
158. The plaintiff is therefore entitled for a decree of possession directing the defendant to vacate and hand over the possession of the suit plot to the plaintiff after removing the superstructure constructed thereupon failing which the defendant would be liable to handover the possession of the suit plot along with the superstructure to the plaintiff.
159. This issue is therefore decided in favour of the plaintiff and against the defendant.
CS no: 1345/08 Page No: 73/91 Issues No. 6, 7 and 8
160. The question to be answered is as to whether the plaintiff is entitled to recover arrears of rent, damages/ mesne profits and interest.
161. PW-1 has deposed that the defendant has not paid the rent with effect from 06.02.2005 and the plaintiff is claiming arrears of rent for a period of three years up till the date of institution of the suit amounting to Rs. 8,549.64.
162. PW-1 further deposed that the prevailing market rate of rent in respect of the suit/similar plot of land at the time of institution of the suit was Rs. 15/- per sq. ft. per month which works out to Rs. 42,750/- per month for the suit plot, admeasuring 2850 sq. ft. (316.66 sq. yds.) and therefore the defendant is liable to pay damages/mesne profits at the aforesaid rate of Rs. 42,750/- per month. The plaintiff has also claimed interest @ 15% per annum.
163. The defendant has contended that the defendant vide its letter dated 01.06.2007 had remitted the rent in respect of the suit property for a further period of 9 years and 11 months vide Demand CS no: 1345/08 Page No: 74/91 Draft dated 01.06.2007 for an amount of Rs.28,262/- drawn on DCB Bank. Hence the claim for arrears of rent is not maintainable.
164. First of all the tender of the said Demand Draft sent vide the said letter dated Ex. PW 1/DX1 (Ex. DW 1/23) was not an unconditional tender of arrears of rent. The said draft and letter were issued for the purpose of the renewal of the lease and not for payment of the arrears of rent. Hence the tender of the said draft cannot be said to be a valid unqualified tender of the arrears of rent. The plaintiff was therefore within its rights not to accept the same. Admittedly the plaintiff has not got the said draft encashed and the original DD has been placed on record and is Ex. DW 1/P1. Thus it cannot be said that the defendant has paid or even tendered the arrears of rent.
165. I therefore hold that the defendant has failed to establish that it has paid the arrears of rent for a period of 3 years prior to the institution of the suit. The plaintiff is therefore entitled to recover an amount of Rs. 8,549.64 @ Rs. 237.49 per month towards arrears of rent for a period of three years prior to the institution of the suit.
CS no: 1345/08 Page No: 75/91
166. The defendant would however be at liberty to take back the original Demand draft from the judicial file after compliance of the judgment.
167. The ends of justice would further be met in case the plaintiff is awarded pendente lite and future interest @ 6% per annum on the aforesaid amount of Rs. 8,549.64 from the date of institution of the suit till realization.
168. As far as the question of damages/ mesne profits is concerned the defendant has not vacated the premises despite the fact that his tenancy was terminated vide Legal Notice dated 10.03.2008. The defendant has occupied and enjoyed the suit plot without any authority of law, therefore, the plaintiff is entitled to damages/mesne profits at the market rate provided the same is not penal and unconscionable.
169. In Bakshi Sachdev (D) by L.Rs. v. Concord (I), 1993 RLR 563, it was held that the damages and mesne profits can be granted at a higher rate than the agreed rate of rent after the expiry of the tenancy and in that case after taking judicial notice of the fact of phenomenal rise CS no: 1345/08 Page No: 76/91 in rents in Delhi and particularly in posh colonies like where the property in suit was located, higher rate of damages/mesne profits was awarded by the court. Reference may also be made to the judgment of the Hon' ble High Court of Delhi in P. S. Bedi v. Project & Equipment Corpn.of India Ltd. reported as AIR 1994 Delhi 255 in this respect.
170. In the judgment titled as "Rattan Arya v. State of T.N." reported as AIR 1986 SUPREME COURT 1444 also it was held that the court can take judicial notice of the enormous multifold increase of rents throughout the country, particularly in urban areas.
171. The contractual rate of rent of Rs. 237.49 per month was fixed in the year 1985. This court can take judicial notice of the fact that since then there has been a phenomenal increase in the rates of rent especially in urban areas. The suit plot is being put to commercial use. The suit plot measures 2850 sq. ft. (316.66 sq. yds.) in area.
172. The plaintiff has claimed damages @ Rs. 15/- per sq. ft. per month which works out to Rs. 42,750/- per month. PW 1 deposed that this was the prevailing market rate of rent in respect of similar plots CS no: 1345/08 Page No: 77/91 at the time of institution of the suit. However he could not produce any other independent evidence in this respect. On the other hand DW 1 stated in his cross examination that he has no idea as to what is the prevailing market rate of rent in respect of the suit property. He stated that it was Rs. 0.75 per sq. ft. per month which does not appear to be a reasonable and probable figure. DW 1 also could not produce any evidence in support of his contention. Moreover this was disputed by the plaintiff.
173. Therefore, keeping in mind the nature, extent and area of the suit plot and the fact that the defendant is using the suit plot for commercial purposes and keeping in mind and taking judicial notice of the fact that rates of rent have sky rocketted in Delhi I am of the considered opinion that the ends of justice would be met in case the plaintiff is awarded damages/ mesne profits at a consolidated rate of Rs. 12,000/- per month in respect of the suit plot. The same is neither penal nor unconscionable. Rather, the figure appears to be a reasonable one keeping in mind the facts and circumstances of the case.
174. These issues are therefore decided in favour of the plaintiff CS no: 1345/08 Page No: 78/91 and against the defendant.
Issue No. 4
175. The question to be answered is as to whether the plaintiff has suppressed or concealed any material facts.
176. The defendant has further contended that the plaintiff has suppressed vital material from the court and is therefore, guilty of practicing fraud from the court and therefore, the suit is liable to be dismissed.
177. Primarily this plea has been raised by the defendant in respect of the averments made by the parties with respect to tendering of advance rent by the defendant for the renewal of the lease. The averment made by the defendant was that he had issued a draft towards the rent for a period 9 years 11 months on 01.06.2007 and this fact was concealed by the plaintiff who had alleged that the rent w.e.f. 06.02.2005 has not been paid. On this ground the defendant claims that the suit should be dismissed on account of suppression of material facts. The defendant has placed reliance on the judgments cited as State of A.P. Vs. T. CS no: 1345/08 Page No: 79/91 Suryachandra Rao reported in (2005) 6 SCC 149, Hamza Haji Vs. State of Kerala reported in (2006) 7 SCC 416, Ram Chandra Singh Vs.Savitri Devi & ors. Reported in (2003) 8 SCC 319, S.P. Chengalvaraya Vs. Jagannath reported in (1994) 1 RRR 253.
178. The judgments cited by the plaintiff are not applicable to the facts and circumstances of the case. There is no question of concealment of material facts in the present case since the during the course of cross-examination PW-1 admitted that such a draft had been received. During the course of evidence of DW 1 such draft was placed on record by the plaintiff and exhibited as Ex. DW1/P1. Moreover I have already held that that tendering of the said draft vide letter dated 01.06.2007 did not amount to a valid tender of the arrears of rent. The plaintiff has not got the said demand draft encashed and hence, it cannot be said that the averment of the plaintiff that the defendant has not paid the arrears of rent was incorrect. There is no material concealment of facts on the part of the plaintiff.
179. The judgments dealing with setting aside of a decree on grounds of fraud are again not applicable to facts and circumstances of CS no: 1345/08 Page No: 80/91 the present case. On facts no case of fraud is made out. Legally speaking fraud that can vitiate a decree and render it liable to be avoided is the fraud that is collateral and extrinsic to the case. This is not the case of the defendant.
180. I am of the opinion that the plaintiff is not guilty of fraud or suppression of any material facts of the nature so as to non suit the plaintiff.
181. This issue is therefore, decided in favour of the plaintiff and against the defendant.
Issue no. 8A
182. The question to be answered is as to whether the plaint has been signed and verified and the suit has been instituted by a duly authorized person on behalf of the plaintiff company.
183. The Plaintiff has contended that Sh. Ajay Maheshwari who was the General Manager and one of the principal officers of the plaintiff company was authorized by the plaintiff company to sign and CS no: 1345/08 Page No: 81/91 verify the plaint and institute the present suit vide Resolution passed by its Board of Directors in the meeting held on 11.02.2008 and thus the suit has been instituted by a duly authorized person.
184. As against this the defendant has contended that the plaint has not been signed and verified and the suit has not been instituted by a duly authorized person. The defendant further denied that Sh. Ajay Maheshwari is the General Manager and principal officer of the plaintiff company and was duly authorized by the plaintiff company/ competent to sign and verify the plaint and institute the present suit.
185. Counsel for the defendant has placed reliance on the judgments titled as NIBRO Ltd. v. National Insurance Company Ltd. reported as 70 Comp. Cases 388 and State Bank of Travancore v. M/s Kingston Computers (I) P Ltd.,in CA no. 2014/ 2011 decided by the Hon' ble Supreme Court on 22.02.2011.
186. However a careful perusal of the judgments cited by the defendant reveals that the said judgments are not applicable to the facts and circumstances of the present case. In both the said cases there was CS no: 1345/08 Page No: 82/91 no board resolution authorizing the person who instituted the suit to actually institute the suit. However in the present case we have a clear board resolution authorizing Sh. Ajay Maheshwari to institute the present suit. Thus the facts of the cases cited by the defendant were clearly different.
187. Moreover in the judgment titled as "United Bank of India v. Naresh Kumar" reported as AIR 1997 SUPREME COURT 3 it was held:
" .............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..........."
CS no: 1345/08 Page No: 83/91
188. In the judgment titled as Bharat Aluminium Co. Ltd. v. Maharashtra Aluminium Corporation reported as 2009(159) D.L.T. 489 it was held:
" ...........13. In view of the ratio of law laid down by the Hon'ble Supreme Court in the above-mentioned case, I disregard the objection regarding the authority of Mr. P.S.Gupta taken by the defendant in its written statement and hold that the present suit has been filed, signed and instituted by a duly authorized person. I take this view in the matter because of the fact that the defendant has not produced any evidence to prove its contention that Mr. P.S. Gupta, through whom this suit was instituted, was not competent to sign, verify and file the present suit.........."
189. Reference may also be made to the judgments titled as M/s. John Tinson Co. Pvt. Ltd. v. Bank of India reported as 2008(9) A.D.(Delhi) 223, Canara Bank v. Marshal Cycle (Delhi) reported as 1999 ISJ (Banking) 194, Power Grid Corporation of India v. Patel Roadways Ltd., reported as 2009(5) R.C.R.(Civil) 510 (M.P.) (DB), H. P. S. I. D. Corporation Ltd. v. Gobind Pharm Chem Pvt. Ltd.
CS no: 1345/08 Page No: 84/91 reported as AIR 2007 HP 3 in this respect.
190. Adverting to the evidence available on record PW-1 has deposed that Sh. Ajay Maheshwari who was the General Manager and one of the principal officers of the plaintiff company was authorized by the plaintiff company to sign, verify and institute the present suit vide Resolution passed by its Board of Directors in the meeting held on 11.02.2008. The true copy of the relevant extract is Ex. PW1/1. The original minutes book was also produced before the court. PW 1 further deposed that Sh. Ajay Maheshwari has left the employment of the plaintiff company and he is conversant to identify the signatures of Sh. Ajay Maheshwari on the plaint and Vakalatnama.
191. PW-1 further stated in his cross-examination that he has brought the original minutes book of the plaintiff company containing the minutes of meeting dated 11.02.2008. He further stated that the said minutes of meeting has been signed by the Chairman Sh. Padam Pat Mody.
192. The counsel for the defendant has referred to an error in CS no: 1345/08 Page No: 85/91 the extract of the resolution Ex. PW 1/1. However this typographical error was explained by PW 1 himself in his cross examination. The heading in the extract Ex. PW1/1 is " certified true copy of the resolution passed at the board meeting held on 11.02.2008 at the registered office of the company" whereas the heading of the minutes of the said meeting, read " Minutes of the meetings of the board of directors of Indian Sulphacid Industries Ltd. held at 8A Middleton Street, Kolkata on 11.02.208" . PW 1 further stated in his cross examination that however, the contents of the extract Ex. PW 1/1 are identical to the relevant portion of the minutes of the said meeting as recorded in the minute book as produced by him. He further deposed that board meeting dated 11.02.2008 was held at Kolkata. He further stated that Ex. PW1/1 is certified by Sh. Padam Pat Mody, Director of the plaintiff company who was also the Chairman of the said meeting dated 11.02.2008.
193. Nothing else was put to PW 1 in his cross examination so as to discredit his testimony on this point. There is no further cross examination of PW 1 on the aforesaid clarification/ explanation given by him during cross examination which goes on to show that the clarification was not correct. The version of PW 1 regarding there being CS no: 1345/08 Page No: 86/91 a typographical error in the heading of the resolution Ex. PW 1/1 is therefore convincing. Moreover the original minutes book was produced before the court and this court has no reason to disbelieve the authenticity and veracity of the said minutes book or the extract Ex. PW 1/1.
194. Further it was contended that the minutes book or the extract Ex. PW 1/1 was not signed by all the Directors who had attended the meeting dated 11.02.2008. However as per the provisions of section 193 of the Companies Act the minutes of meeting are required to be signed by the Chairman of the meeting only. Adverting to the facts the minutes book and the extract Ex. PW 1/1 were both signed by the Chairman Sh. Padam Pat Mody, Director. The net result is that Ex. PW 1/1 has been duly proved and the same is a valid document.
195. PW 1 further stated in his cross examination that Sh. Ajay Maheshwari was the General Manager of the company in the year 2008 and now he has resigned and his resignation letter is available in the records of the plaintiff company. However the counsel for the defendant did not call upon PW 1 to produce the said letter. PW 1 categorically CS no: 1345/08 Page No: 87/91 deposed that Sh. Ajay Maheshwari was the General Manager of the company and there is nothing in the cross examination which could persuade this court to disbelieve PW 1 on this point. The defendant has not adduced any evidence to the contrary.
196. Under Order 29 Rule 1 CPC the pleadings may be signed and verified by a principal officer of the plaintiff company. There can be no dispute about the proposition that a General Manager is one of the principal officers of a company. The evidence on record establishes that Sh. Ajay Maheshwari was the general manager of the plaintiff company and was therefore competent to sign and verify the pleadings. He was also specifically authorized to sign and verify the pleadings and institute the suit vide board resolution Ex. PW 1/1. The material on record clearly shows that his actions were not only authorized but also approved and ratified by the plaintiff company.
197. The defendant has failed to adduce any evidence to the effect that Sh. Ajay Maheshwari was not authorized to sign and verify the pleadings and institute the suit. In fact DW 1 stated in his cross examination that he has not seen the minutes book of the plaintiff CS no: 1345/08 Page No: 88/91 company and he does not know that the plaint bears the signatures of Sh. Ajay Maheshwari and he is the duly authorised person on behalf of the plaintiff. Thus DW 1 had no knowledge of this issue.
198. The standard of proof for establishing the authority of Sh. Ajay Maheshwari to institute the suit is again of preponderance of probabilities. I therefore hold that the plaintiff has established by preponderance of probabilities that Sh. Ajay Maheshwari was authorized to sign and verify the pleadings and institute the suit and the present suit has been duly instituted by a duly authorized person.
199. This issue is therefore decided in favour of the plaintiff and against the defendant.
RELIEF
200. In view of the findings and reasons stated herein above, the plaintiff is entitled to a decree of recovery of possession directing the defendant to hand over the vacant possession of the suit plot i.e. plot of land measuring 316.66 sq. yds. bearing private no. 23, more specifically shown in the red colour in the site plan, and forming part of the estate CS no: 1345/08 Page No: 89/91 known as the Indian Sulphacid Industries Compound (also known as the Shambhu Nath Compound) bearing Municipal No. 458-466, Gali no. 8, Friends Colony, G.T. Road, Shahdara, Delhi to the plaintiff after removing the superstructure/ building constructed thereupon within a period of 2 months failing which the defendant is directed to handover the possession of the suit plot along with the superstructure to the plaintiff.
201. The plaintiff is also entitled to a decree of an amount of Rs. 8,549.64 against the defendant towards arrears of rent along with pendente lite and future interest @ 6% per annum on the amount of Rs. 8,549.64 from the date of institution of the present suit till realization.
202. The plaintiff is also awarded pendente lite and future damages/mesne profits at the rate of Rs. 12,000/- per month from the date of institution of the suit till the date of handing over of the vacant possession of the suit plot to the plaintiff, payable by the defendant.
203. The suit of the plaintiff is accordingly decreed with costs in the aforesaid terms in favour of the plaintiff and against the defendant.
CS no: 1345/08 Page No: 90/91 Decree sheet be accordingly prepared. The decree qua the pendente lite damages/ mesne profits shall not be prepared till balance court fee on the amount as on the date of decree is paid. File be consigned to record room thereafter.
Announced in the open (SAURABH KULSHRESHTHA) Court on 29.02.2012 COMMERCIAL CIVIL JUDGE/ ARC (East)
(Judgment contains 91pages.) KARKARDOOMA COURTS, DELHI CS no: 1345/08 Page No: 91/91