Delhi District Court
Bharat Agarwal vs Nmdc Ltd on 20 August, 2025
DLND010078632022
IN THE COURT OF MS. HEMANI MALHOTRA
DISTRICT JUDGE (COMMERCIAL-03),
PATIALA HOUSE, NEW DELHI
CS (COMM) No.788/2022
CNR No.DLND010078632022
In the matter of :-
1 Bharat Agarwal,
S/o Sh. Sharad Kumar,
R/o 147, BC Lines, Mall Road,
Opp. Head Post Office, Meerut Cantt.
Uttar Pradesh-250001.
2 Rishab Agarwal
S/o Sh. Sharad Kumar,
R/o 147, BC Lines, Mall Road,
Opp. Head Post Office, Meerut Cantt.
Uttar Pradesh-250001.
3 Sharad Kumar,
S/o Late Sh. Prabhat Kumar Agarwal,
R/o 147, BC Lines, Mall Road,
Opp. Head Post Office, Meerut Cantt.
Uttar Pradesh-250001.
4 Dinesh Kumar,
S/o Late Sh. Prabhat Kumar Agarwal,
R/o B-44, South Extension Part II,
Digitally signed
by HEMANI
MALHOTRA
HEMANI
Date:
MALHOTRA 2025.08.20
16:53:14
+0530
CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 1 / 25
New Delhi-110049. ....Plaintiffs
Versus
NMDC Limited
Khanij Bhavan,
10-3-311/A, Castle Hills
Masab Tank, Hyderabad-500028.
Email ID:[email protected],
[email protected],
[email protected]
Also at:-
PTI Building,
2nd Floor, Parliament Street,
New Delhi-110001
Also at:
109-109A, First Floor,
Surya Kiran Building,
19, Kasturba Gandhi Marg,
New Delhi-110001. ....Defendant
Date of Institution : 16.09.2022
Arguments concluded : 23.07.2025
Date on which judgment pronounced : 20.08.2025
JUDGMENT
1. The plaintiff has filed the present commercial suit for possession, arrears of rent, mesne profits, interest and damages against the defendant.
Digitally signed by HEMANI MALHOTRAHEMANI Date: MALHOTRA 2025.08.20 16:53:23 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 2 / 25
2. Brief facts as epitomized in the plaint are that the plaintiffs are owners of property bearing no. 109-109A, measuring 1670 sq.ft, First Floor, Surya Kiran Building, 19, Kasturba Gandhi Marg, New Delhi-110001 (hereinafter referred to as 'suit property'). The defendant is a Government of India Enterprise. The defendant rented the suit property on lease from the plaintiffs' predecessors in the year 1972. Plaintiffs by way of civil suit CS No. 56333 of 2016 titled, 'Sharad Kumar v/s NMDC Limited' on 29.07.2011 had sought eviction of defendant from suit property, which during its pendency was compromised and pursuant thereto, a fresh Lease Deed dated 28.08.2017 was executed between the parties whereby it was agreed that term of the Lease will be for a period of 4 years w.e.f. 01.04.2016 and defendant will pay monthly rent @ Rs. 130/- per sq.ft for the area of the suit property i.e. 1670 sq.ft totaling Rs. 2,17,100/- per month.
3. It is stated that Lease Deed dated 28.08.2017 stood determined on 31.03.2020 by efflux of time and defendant paid the complete rent till 31.03.2020 to the plaintiffs in proportion to their respective shares in ownership of suit property i.e. 1/4th each. However, despite determination of Lease on 31.03.2020, defendant continued to occupy the suit property.
4. The plaintiff further claimed that vide letter dated Digitally signed by HEMANI MALHOTRA HEMANI MALHOTRA Date:
2025.08.20 16:53:31 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 3 / 25 10.06.2020, the defendant gave notice qua its intention to vacate the suit property on 31.08.2020 and through letter dated 10.06.2020, defendant also asked plaintiffs to issue 'No dues certificate' that plaintiffs will have no further claim in respect of suit property.
5. Though defendant paid rent w.e.f 01.04.2020 upto 31.08.2020 @ Rs. 130/- per sq.ft per month, plaintiffs vide letter dated 20.08.2020 followed by Legal notice dated 28.08.2020 made a claim for occupation charges @ Rs. 310/- per sq.ft for period after determination of the lease i.e. for period w.e.f. 01.04.2020. Thereafter, plaintiff no.2 visited the suit property on 31.08.2020 for taking possession thereof from defendant. However, he found extensive damages in the suit property which was in violation of Clause 2.8 of the Lease Deed.
6. Plaintiff no.2, therefore, refused to take possession and requested defendant to restore the suit property to its original condition. Plaintiffs also vide their letter dated 01.09.2020 made the same request to defendant. It is stated that thereafter, defendant did some repair works in the suit property and plaintiffs took photographs of suit property on 08.09.2020.
7. Subsequently, in the meeting held on 11.09.2020, defendant offered to pay occupation charges for the period from Digitally signed by HEMANI HEMANI MALHOTRA MALHOTRA Date:
2025.08.20 16:53:38 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 4 / 25 01.04.2020 to 31.08.2020 @ Rs. 250/- per sq.ft per month which plaintiffs reluctantly agreed subject to defendant making complete payment within a week. Defendant did not make any payment, therefore, plaintiffs' acceptance of defendant's offer @ Rs. 250/- per sq.ft per month became redundant.
8. It is alleged that defendant vide letter dated 06.10.2020 gave a reply to plaintiffs' letter dated 01.09.2020 and legal notice dated 28.09.2020 wherein defendant took a wrong stand that they are handing over the suit property to plaintiffs in same condition in which it was handed over to defendant in year 1972. It is further alleged that vide repeated communications exchanged between the parties, the plaintiffs kept demanding possession of the suit property subject to their claim of arrears etc, however, defendant kept a condition requiring plaintiffs to issue No Due Certificate and that the plaintiffs' claim or any demand was illegal. The plaintiffs lastly wrote a letter dated 03.05.2022 whereby plaintiffs made it clear that they will not issue 'No Dues Certificate' being demanded by defendant and requested the defendant to handover vacant and peaceful possession of the suit property to plaintiffs. However, despite receipt of said letter, defendant did not handover peaceful and vacant possession of property to plaintiffs and continued to occupy and possess the same. Hence, defendant is liable to pay occupation charges/mesne Digitally signed by HEMANI MALHOTRA HEMANI Date: MALHOTRA 2025.08.20 16:53:46 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 5 / 25 profits for using the suit property w.e.f. 01.04.2020 till it handovers vacant and peaceful possession at the prevailing rate of rent/occupation charges in the area. As the defendant failed to handover the possession of suit property, the plaintiffs approached NDDLSA for pre-institution mediation, however, defendant on its appearance, did not give consent for mediation and consequently, non starter report was generated. Hence, the present suit.
9. Pursuant to the receipt of summons, the defendant filed written statement and claimed that suit was not maintainable as there was no landlord-tenant relationship in existence between the parties. Defendant had vacated the suit property on 27.08.2020 and at the time of vacating the suit property, the defendant had cleared all the agreed rent in terms of unregistered lease deed dated 28.08.2017. Defendant further averred that for this reason, the present suit was not a commercial suit. Further, that the lease deed dated 28.08.2017 was unregistered and executed between plaintiff no.3 and 4, therefore, the plaintiff no.1 and 2 cannot maintain the present suit against the answering defendant.
10. The defendant further averred that suit property was initially let out to NMDC in the year 1973 which was extended from time to time by the then lessors Smt. Kamla Devi and Smt. Saroj Rani and last Lease Deed was Digitally signed by HEMANI MALHOTRA HEMANI Date: MALHOTRA 2025.08.20 16:53:53 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 6 / 25 executed on 28.08.2017 between the defendant and Mr. Sharad Kumar (owner of 3/4th share of the suit property) and Mr. Dinesh Kumar (owner of 1/4th share of the suit property) i.e. plaintiff nos.3 and 4 respectively for period from 01.04.2016 to 31.03.2020 @ Rs.130 per sq.feet per month. In the month of June, 2019, plaintiff no.3 through his Advocate requested to share 1/4th of the rent with Sh. Rishab Agarwal/plaintiff no.2 and 1/4th of rent with Sh. Bharat Agarwal/plaintiff no.1 w.e.f. July, 2019. Defendant further averred that as per Clause 4.3 of Lease deed dated 28.08.2017, the lessee had the option for further renewal for any number of years, subject to enhancement in rent to tune of 20% of last paid rent. The defendant in terms of Clause 4.3 and 4.4 of the lease deed, in the month of February, 2020, invited the co-owners i.e. plaintiffs to their office at New Delhi for negotiation/finalization of rent and other terms and conditions in line with existence lease deed i.e. 20% enhancement, however, plaintiffs did not agree.
11. Thereafter, due to outbreak of Covid 19 pandemic, lockdown having imposed on 22.03.2020, the office of defendant was closed and in June, 2020, a notice dated 10.06.2020 was served by the defendant to plaintiffs informing that defendant will vacate the suit property by 31.08.2020.
12. The defendant further averred that suit premises was let out Digitally signed by HEMANI MALHOTRA HEMANI Date: MALHOTRA 2025.08.20 16:53:59 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 7 / 25 to NMDC in the year 1973 as a raw flat and in terms of Clause 2.8 of the Lease Deed, the lessee was to restore the suit property in its original condition. The defendant restored the suit property in better condition than the original condition as existed in 1973 and same was handed over to plaintiff no.2 by way of authorization letter dated 30.08.2020. It was further averred that as an abundant precaution, the defendant had taken photographs of the premises as on 27.08.2020 by showing the exact condition of the suit property on the day of handing over possession to the plaintiffs.
13. It is the claim of defendant that since the plaintiffs did not agree for renewal of lease deed, therefore, the defendant rented another premises within the same vicinity. Defendant further stated that on the one hand, plaintiff no.2 had visited the suit property with the authorization letter for taking possession of the suit property and on the other hand, with a malafide intention, he issued a legal notice dated 28.08.2020 through his advocate asking user charges @ Rs. 350/- per sq.ft per month from 01.04.2020 and in the said legal notice, the plaintiffs have admitted that the suit property will be vacated by the defendant on or before 31.08.2020. The said notice was replied by Advocate of defendant by reply letter dated 31.08.2020 in which it was clarified that suit premises was vacated on 27.08.2020 in terms of the advance notice dated 10.06.2020 and all the Digitally signed by HEMANI HEMANI MALHOTRA MALHOTRA Date:
2025.08.20 16:54:06 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 8 / 25 rent upto 31.08.2020 have been paid by defendant and received by plaintiffs without any objections. Thereafter, defendant averred that plaintiff vide various communication/notices made frivolous claims which were replied by defendant with consistent stand that defendant had vacated the suit property on 27.08.2020 in the very same condition as it was handed over to defendant in the year 1973 and further rent upto 31.08.2020 had been paid by defendant which was received by plaintiffs without any objection. Hence, it was prayed that suit be dismissed with exemplary costs.
14. No replication to the written statement was filed by the plaintiffs.
15. From the pleadings of the parties, following issues were framed by my learned Predecessor vide order dated 02.11.2023:-
1. Whether the plaintiffs are entitled for occupation charges of suit property for the period 01.04.2020 till 31.07.2022 from the defendant as prayed for in terms of prayer (b), if yes, at the rate of 310 per sq. ft. per month or at what rate? OPP.
2. Whether the plaintiffs are entitled to mesne profits/occupation charges with respect to suit property, if so, at what rate and for what period?
OPP.
3. Whether the plaintiffs are entitled for interest on Digitally signed by HEMANI MALHOTRA HEMANI Date: MALHOTRA 2025.08.20 16:54:13 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 9 / 25 decreetal amount, if yes, at what rate and for what period? OPP.
4. Whether the relationship between plaintiffs and defendant as landlord-tenant was ceased on 28.08.2020 and defendant handed over the property to the plaintiffs on 28.08.2020 with due intimation? OPD.
5. Relief.
16. Vide order dated 02.11.2023, Learned Predecessor of this court appointed Ms. Shikha Sharma, Advocate, as Local Commissioner for recording of evidence of the parties and thereafter vide order dated 21.10.2024, Learned Predecessor of this Court appointed Ms. Promila Kapoor, Advocate, as Local Commissioner for recording of evidence of the parties.
17. The plaintiffs to prove their case, examined Sh. Rishab Agarwal, plaintiff no.2 as PW-1 who in his evidence by way of affidavit Ex.PW-1/A reiterated the averments made in the plaint and relied upon the following documents:-
1. Plaintiff's Letter dated 20.08.2020 along with original postal receipts Ex.PW-1/1.
2. Plaintiff's letter dated 03.05.2022 along with original postal receipts Ex.PW-1/5.
3. Non Starter report Ex.PW-1/9.
18. The plaintiffs also examined Sh. Bharat Agarwal, plaintiff no.1 as PW-2 who in his evidence by way of affidavit Ex.PW-2/A reiterated the averments made in the plaint and relied upon the following documents:-
Digitally signed by HEMANI MALHOTRAHEMANI Date: MALHOTRA 2025.08.20 16:54:20 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 10 / 25
1. Eleven photographs of the suit premises taken on 31.08.2020 - Ex.PW-2/1 (colly).
2. Three photographs of the suit premises taken on 08.09.2020 - Ex.PW-2/2.
3. Certificate under Section 65 B of the Indian Evidence Act in respect of above mentioned photographs - Ex.PW-2/3.
4. Email dated 11.10.2021 - Ex.PW-2/4
5. Certificate under Section 65B of the Indian Evidence Act and Declaration under Order 11 Rule 6 (3) CPC in support of an email dated 11.10.2021 - Ex.PW-2/5 and Ex.PW-2/6 respectively.
19. The plaintiffs further examined Ms. Lalita Arora, summoned witness as PW-3 and Sh. Jitender Singh Rawat, Section Officer, Directorate of Public Grievance, office at Jeevan Vihar Building, Patel Chowk, New Delhi as PW-4. Plaintiffs also examined Sh. Rajiv Sharma, Estate Manager, Surya Kiran Maintenance Society (Regd.), Surya Kiran Building, 19, Kasturba Gandhi Marg, New Delhi, as PW-5.
20. It is significant to mention here that no evidence was led by defendant.
21. This Court in compliance of order No./5/D-3/Gaz.1A/DHC/2025 dated 30.05.2025 of Hon'ble High Court of Delhi, took charge of this Court in the afternoon of 31.05.2025 and proceeded to hear the final arguments on 23.07.2025.
22. Pertinently, the entire case of the plaintiffs hinges upon Issue no.4, therefore, it is being decided the first and the Digitally signed by HEMANI HEMANI MALHOTRA MALHOTRA Date:
2025.08.20 16:54:37 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 11 / 25 same is as follows;
Whether the relationship between plaintiffs and defendant as landlord-tenant was ceased on 28.08.2020 and defendant handed over the property to the plaintiffs on 28.08.2020 with due intimation? OPD.
23. The present suit is a suit for possession, arrears of rent and mesne profits sought by plaintiffs against the defendant which is based upon Lease Deed dated 28.08.2017 Ex.D-1 executed between Sh. Dinesh Kumar/plaintiff no.3, owner of 1/4th share of the suit property and Sh. Sharad Kumar, plaintiff no.4, owner of 3/4th share of the suit property on the one side and NMDC/defendant on the other side. The Lease Deed Ex.D-1 was executed on 28.08.2017 and duration of lease was w.e.f. 01.04.2016 to 31.03.2020 i.e. for a period of four years. Vide the said Lease Deed Ex.D-1, it was agreed that defendant will pay monthly rent @ Rs. 130/- per sq. ft. per month i.e. Rs. 2,17,100/- per month.
24. It is the case of plaintiffs that the Lease Deed Ex.D-1 stood determined on 31.03.2020 by efflux of time and defendant paid complete rent till 31.03.2020. However, despite determination of lease on 31.03.2020, defendant continued to occupy the suit property and paid monthly rent w.e.f. 01.04.2020 till 31.08.2020 @ Rs. 2,17,100/- despite the fact that defendant became a tenant at sufferance w.e.f. 01.04.2020 and that the plaintiffs were entitled to occupation charge @ Rs. 310/- per sq.ft w.e.f. 01.04.2020 as per their legal notice dated 28.08.2020 (Ex.P-6).
Digitally signed by HEMANIHEMANI MALHOTRA MALHOTRA Date:
2025.08.20 16:54:45 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 12 / 25
25. As per the claim of the plaintiffs, even though, the defendant vide letter dated 10.06.2020 Ex.P-5, expressed its intention to vacate the suit property on 31.08.2020, the offer to vacate the suit property was conditional as the defendant asked the plaintiffs "And also arrange to issue no due certificate from you, that you have no further claims in respect of leased premises". It is the claim of the plaintiff that since, as per Clause 2.8 of Lease Deed dated 28.08.2017 Ex.D-1, the lessee was to restore the suit property to original condition (normal wear and tear, etc. as mentioned in sub-clause 2.5 excepted) and extensive damage to the suit property was found, plaintiff no.2/PW-1 refused to take possession followed by various communications to the same effect.
26. Whereas, it is the defendant's case that it vacated the suit property on 27.08.2020 and placed a notice on the door offering the keys to be collected from its new office and that the entire claim of plaintiffs as set up by them was false. The defendant asserted that possession was handed over on 27.08.2020 and no charges beyond that date were payable.
27. Therefore, in the nutshell while the attempt to hand over possession and offer of keys by defendant is not denied, the plaintiffs in the light of Clause 2.8 of Lease Deed Ex.D-1 Digitally signed by HEMANI HEMANI MALHOTRA MALHOTRA Date:
2025.08.20 16:54:53 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 13 / 25 dispute the legal effect and validity of the same. The plaintiffs also do not dispute the fact of refusal by them to take over physical possession of suit property. The fact that the keys of the suit property remained in possession of defendant till they were handed over on 23.05.2023 is also not in dispute.
28. The record reflects that during the pendency of the present suit, the plaintiffs had filed an application under Section 151 CPC before the learned Predecessor of this Court seeking directions to the defendant to hand over the keys. The said application was dismissed by order dated 21.04.2022, whereafter the plaintiffs preferred CM(M) 810/2023 before the Hon'ble Delhi High Court. The Hon'ble High Court while allowing the CM(M) 810/2023 vide order dated 15.05.2023 made some relevant observations which are as under :-
"4. Mr. Kailash Pandey, learned counsel appears for the respondent on advance notice and submits that the respondent is agreeable to handing over the keys without prejudice to the rights and contentions of the respondent to raise before the learned Trial Court the objection that, the mere handing over the keys now, will not tantamount to an admission on their part that they were in fact in possession of the subject suit property from 31.08.2020 till date.
5. Mr. Tarun Singla, learned counsel appearing for the petitioner also submits that the acceptance of the original keys are also without prejudice to his own rights and contentions raised before the learned Trial Court to claim that the possession was continuing with the respondent till date and the ancillary damages, etc. raised before the learned Trial Court.
6. In view of the aforesaid, the objections and Digitally signed by HEMANI HEMANI MALHOTRA MALHOTRA Date:
2025.08.20 16:54:59 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 14 / 25 contentions of the respective parties are reserved.
7. Mr. Singla, learned counsel appearing on behalf of petitioners submits that the Authorized Representative of the petitioner will approach Mr. Pandey, learned counsel for the respondent on 23.05.2023 at 4:00 PM at 92, Old Chambers, Supreme Court Compound, New Delhi, against a valid receipt.
8. Mr. Pandey, without prejudice, reiterates the stand taken by NMDC that the possession of the property was handed over to the petitioner on 27.08.2020, which is disputed by the petitioner.
9. In view of the aforesaid, the petition is disposed of with no order as to costs."
29. It is also an undisputed fact that as per the directions of Hon'ble High Court, the defendant handed over the keys to the plaintiffs on 23.05.2023.
30. In the gamut of the aforesaid facts, it can be safely deduced that the central dispute between the parties pertains to the date on which possession of the suit premises is deemed to have been handed over by the defendant to the plaintiffs and if the plaintiffs could have refused the possession of suit property under the garb of clause 2.8 of the Lease Deed Ex.D-1.
31. The Lease Deed Ex.D-1 on its bare perusal shows that the duration of the Lease Deed is four years i.e. w.e.f. 01.04.2016 to 31.03.2020.
32. Section 107 of the Transfer of Property Act envisages that a lease of immovable property from year to year or for any Digitally signed by HEMANI MALHOTRA HEMANI Date: MALHOTRA 2025.08.20 16:55:12 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 15 / 25 term exceeding one year, or reserving a yearly rent can be made only by a registered instrument. Section 106 of the Transfer of Property Act provides that such a lease deed which is unregistered shall be deemed to be a lease from month to month terminable on the part of either lessor or lessee, by 15 days notice. Consequently, in the absence of registration, the Lease Deed dated 28.08.2017 Ex.D-1 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 defendant.
33. Strangely, despite the fact that the plaintiffs claimed possession and recovery of arrears of rent, mesne profits, etc. on the basis of this very Lease Deed Ex.D-1, they did not produce the same. Instead, it was the defendant who produced photocopy of Lease Deed Ex.D-1 which was admitted by plaintiffs.
34. Be that as it may, in the judgment titled as M/S. PAUL RUBBER INDUSTRIES PRIVATE LIMITED VS. AMIT CHAND MITRA, arising out of petition for Special Leave to Appeal (Civil) No.15774/2022, it was observed that :-
34*.From the principles laid down in the various decisions of this Court and the High Courts, as referred to hereinabove, it is evident that:Digitally signed by HEMANI MALHOTRA
HEMANI Date: MALHOTRA 2025.08.20 16:55:19 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 16 / 25
1. A document required to be registered, if unregistered is not admissible into evidence under Section 49 of the Registration Act.
2. Such unregistered document can however be used as an evidence of collateral purpose as provided in the proviso to Section 49 of the Registration Act.
3. A collateral transaction must be independent of, or divisible from, the transaction to effect which the law required registration.
4. A collateral transaction must be a transaction not itself required to be effected by a registered document, that is, a transaction creating, etc. any right, title or interest in immovable property of the value of one hundred rupees and upwards.
5. If a document is inadmissible in evidence for want of registration, none of its terms can be admitted in evidence and that to use a document for the purpose of proving an important clause would not be using it as a collateral purpose."
35. Clearly, Clause 2.8 of the Lease Deed Ex.D-1 on which heavy reliance is placed by plaintiffs is neither a collateral purpose nor divisible from the Lease Deed Ex.D1 and is an important relevant clause of the unregistered Lease Deed Ex.D1. The scrutiny of the evidence led by the plaintiffs reflect that the entire evidence of plaintiffs centered around proving that plaintiffs were not mandated to receive possession of suit property, when it was offered by defendant as according to them the suit property was severely damaged by defendant. And, the plaintiffs in terms of Clause 2.8 were not obligated to receive possession until the suit property was restored to its original. The evidence of plaintiffs, in addition to the above, also concentrated Digitally signed by HEMANI MALHOTRA HEMANI Date: MALHOTRA 2025.08.20 16:55:35 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 17 / 25 upon proving mesne profits on account of the claim that defendant became a tenant at sufferance w.e.f. 01.04.2020.
36. In so far as the question, whether plaintiffs could have declined taking possession of suit property despite Clause
2.8 of the Lease Deed Ex.D-1, not being a collateral purpose, is concerned, the answer to the same lies in Section 108 of Transfer of Property Act, which defines rights and liabilities of Lessor and Lessee, in absence of a contract or local usages to the contrary. Section 108 (m) of The Transfer of Property Act provides that :-
"(m) the lessee is bound to keep, and on the termination of the lease to restore, the property in as good condition as it was in at the time when he was put in possession, subject only to the changes caused by reasonable wear and tear or irresistible force, and to allow the lessor and his agents, at all reasonable times during the term, to enter upon the property and inspect the condition thereof and give or leave notice of any defect in such condition; and, when such defect has been caused by any act or default on the part of the lessee, his servants or agents, he is bound to make it good within three months after such notice has been given or left"
37. On the plain reading of the aforesaid provision, there is not an iota of doubt that even if Clause 2.8 of unregistered Lease Deed Ex.D-1 cannot be looked into, yet the defendant was under a bounden duty to restore the suit property in good condition. As already observed in the preceding para that no evidence was led by defendant, the defendant for the said reason failed to prove that the suit Digitally signed by HEMANI MALHOTRA HEMANI Date: MALHOTRA 2025.08.20 16:55:42 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 18 / 25 property was restored to its original condition. But, "Whether the plaintiffs could have declined to receive possession of suit property in the absence of this action on the part of defendant is an extremely pertinent question which will clinch the issue and consequently, the present lis.
38. To answer this question, it is worthwhile to mention here that it is an undisputed fact that vide letter/communication dated 10.06.2020 Ex.P5, the defendant had in categoric terms announced that defendant will vacate the suit property on 27.08.2020 and had requested the plaintiffs to take over the suit property on 31.08.2020 along with keys.
39. In A.C. RAMAN v. MITHAVALLY SEYDALI'S SON VALIYAKATH KAITHAKKAL KUNHI BARA HAJI, AIR 1953 Madras 996, in similar circumstances, it was held as under :-
"...The plaintiff, it must be stated, has misconceived his remedy and by no stretch of imagination could it be said that the plaintiff, who has refused to take possession when possession was offered, could hold the defendant liable for any rents after the lease was terminated and after the plaintiff refused to take possession. The grounds alleged for refusing to take possession by the plaintiff were that the building was damaged and that until and unless the building is repaired, the plaintiff is not obliged or bound to take possession. Such a position seems to be wholly untenable. When the lease has been terminated by a valid notice as provided for under S. 111 of the Transfer of Property Act and when possession has been offered and the plaintiff had refused to take possession, it cannot be held that the lease would still continue in favour of the Digitally signed by HEMANI HEMANI MALHOTRA MALHOTRA Date:
2025.08.20 16:55:57 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 19 / 25 plaintiff..."
"In the present case it is not a case of any failure on the part of the defendant to deliver up vacant possession of the premises. On the other hand, it is quite patent that after terminating the tenancy the defendant went to the extent of offering the key of the premises and it was refused. And the refusal is on the ground that the building should be put in complete repair and then only the landlord would take possession. Such a position taken up by the landlord is wholly untenable. ...There is nothing in this section to compel the defendant, who has terminated the tenancy and who has offered to deliver vacant possession and whose offer has been refused more than once, to remain in the premises until the premises, which a recalcitrant tenant might have purposely or otherwise damaged, is put in a state of proper repair. If he fails to comply with any demand, however legitimate it might be, from the plaintiff, the remedy of the plaintiff would be to sue for damages for the neglect or default or other deliberate acts of the defendant. The remedy that the plaintiff has chosen in this case seems to be absolutely without any basis. The correct law, as pointed out by the learned counsel for the petitioner, has been laid down in - "Baliramgiri v. Vasudev", 22 Bom 348 (D) and also in - Ábdul Qayum v. Mohammad Fazal Azim‟, AIR 1937 Lah 121 (E). When once a proper notice has been given and the tenancy has been properly terminated the plaintiff‟s right would be not to question the notice or the termination of the tenancy, but to claim damages for any loss caused to the plaintiff by reason of any willful negligence or default on the part of the tenant. The learned Judges in the decision in 22 Bom 348 (D) have considered the question as to what is to happen if possession is not given after a valid notice. "Does it continue the tenancy indefinitely, or does it give rise to a claim for damages on the part of the landlord? The latter appears to us to be its legal result."
40. The aforesaid judgment was also referred to in the judgment of H.S. BEDI VS. NATIONAL HIGHWAY AUTHORITY OF INDIA, pronounced on 14.05.2015 by the Hon'ble High Court of Delhi, amongst other judgments and the Hon'ble High Court of Delhi had thereafter summarized Digitally signed by HEMANI HEMANI MALHOTRA MALHOTRA Date:
2025.08.20 16:56:06 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 20 / 25 the principles of law, arising out of similar situations as that of the present case. The said principles are reproduced here as under :-
"10. Summary of Principles of law:
From the analysis of the above decisions and the provisions with which we are concerned, the following principles emerge:-
10.1. Determination of lease - Section 111 of the Transfer of Property Act provides various modes of determination of lease such as determination by efflux of time [Section 111(a)]; expiry of the period of notice of termination [Section 111(h)]; express surrender [Section 111(e)] and implied surrender [section 111(f)].
10.2. Obligations of the landlord and the tenant upon determination of lease - The tenant is bound to handover the vacant and peaceful possession of the tenanted premises to the landlord upon determination of lease [under Section 108(q)].
10.3. Duty of tenant to restore the tenanted premises -The tenant is bound to restore the tenanted premises in the same condition in which it was taken.[Section 108(m]. 10.4. Remedy of landlord in the event of non-restoration by the tenant - In the event of non-restoration of the tenanted premises to their original condition, the remedy of the landlord is to adjust the damages in the security deposit or sue the tenant for damages after taking over of the possession.
10.5. Landlord cannot refuse to take over the possession upon determination of lease and offer of possession by the tenant - The landlord, upon determination lease and offer of possession by the tenant, cannot refuse to take over the possession on the ground that the property has been damaged or not restored to its original condition.
10.6. Consequences of the landlord refusing to take the possession offered by the tenant - In the event of refusal of the landlord to take the possession offered by the tenant, the possession shall be deemed to have been delivered to the landlord and the tenant shall not be liable to pay the rent thereafter. 10.7. Consequences of the tenant refusing to handover the possession - If the landlord is ready to accept the possession but the tenant refuses/fails to handover the Digitally signed by HEMANI HEMANI MALHOTRA MALHOTRA Date:
2025.08.20 16:56:13 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 21 / 25 possession, the liability of the tenant to pay the rent shall continue till the handing over of the possession. 10.8. Remedy of tenant in case of non-refund of security deposit by the landlord - The tenant cannot refuse to hand over the possession till the security deposit is refunded. In the event of non-refund of security deposit by the landlord, the remedy of the tenant is to sue the landlord for refund of security deposit after handing over the possession.
(Emphasis supplied)
41. Therefore, although Section 108 (m) of The Transfer of Property Act casts a duty upon the lessee to restore the property in as good condition as it was in at the time when he was put in possession, the lessor cannot refuse to take possession of the property when it is offered by the tenant. PW-1 Sh. Rishab Agarwal in his cross-examination dated 19.03.2024 categorically admitted that the possession of the suit property was refused on the ground that according to PW-1 the suit property was in 'torn condition' and not because the defendant demanded No Dues certificate. The relevant portion of the cross-examination is reproduced hereunder :-
"(The witness attention is drawn on Ex.P-5 at page 54-55 wherein it is stated that "we would request you to kindly depute your authorized representative to take over the premises on 31.08.2020 along with keys and signing the joint memo to handover and taking over the quiet, peaceful possession of the said premises.") Q.12 Have you taken possession of the suit property on or before 31.08.2020?
Ans. On 31.08.2020 Mr. Abhijit Mishra of respondent's office took me to the suit premises. Two-three more persons from respondent's office were also there. Aforesaid officers of respondent demanded No Dues Certificate from us and said that upon providing of no dues certificate they will hand over Digitally signed by HEMANI HEMANI MALHOTRA MALHOTRA Date:
2025.08.20 16:56:20 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 22 / 25 the possession to us. However, the premises was in very bad shape and in torn conditions and various things were missing, therefore, I could not take the possession. Further said, I was also not in a position to give the No Dues Certificate. Q.13. I put it to you that you deliberately refused to take the possession of the suit property. What do you have to say?
Ans. It is incorrect.
Q.14. I again put it to you that you refused to take possession of the suit property because the premises was in torn and damaged condition. What do you have to say?
Ans. This is correct. There was a further demand of No Dues Certificate from respondents, which we were not in a position to give.
(The witness attention is drawn on Ex.P-7 at page 58 wherein it is stated that, "today I along with your representative Mr. Abhijeet Mishra (Manager Personnel) along with other person's visited the premises to take the physical possession, but on my visit I saw that the premises in completely torn condition. Photographs are enclosed (11 photos).
Therefore, I have refused to accept / take possession of my premises in such torn condition and nor you have settled my claim of your unauthorized occupation of the premises").
Q.15. Is it correct that you have not stated about the NOC asked by the defendant ?
(Objected to on the ground that the question pertains to the contents of a document which cannot be asked during cross-examination.) (This question is necessary as nowhere the plaintiff stated about the No Dues Certificate and trying to evade the answers).
(LC Observation: The objection is kept open and to be considered by the Hon'ble Court subject to objections let witness answer the question.) Ans. It is correct."
42. In the light of the aforesaid crucial discussion on law and the testimony of PW-1, it is evident that the offer of possession by defendant was made vide letter 10.06.2020 Digitally signed by HEMANI MALHOTRA HEMANI Date: MALHOTRA 2025.08.20 16:56:27 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 23 / 25 Ex.P-5 requesting the plaintiffs to take possession of the suit property on 31.08.2020, which was refused by the plaintiffs. Hence, it is held that the possession of the suit property is deemed to have been delivered to the plaintiffs on 31.08.2020.
Issue no.4 is decided accordingly.
43. Findings on issue no.1 :
Issue no.1 : Whether the plaintiffs are entitled for occupation charges of suit property for the period 01.04.2020 till 31.07.2022 from the defendant as prayed for in terms of prayer (b), if yes, at the rate of 310 per sq. ft. per month or at what rate? OPP.
Regarding, occupation charges @ Rs. 350/- per sq.ft per month from 01.04.2020, it was strenuously argued by Learned Counsel for plaintiffs that since the Lease Deed Ex.D-1 stood determined by efflux of time on 31.03.2020, the defendant was liable to pay occupation charges @ Rs.350/- per sq. ft. per month from 01.04.2020. Undisputedly, the Lease Deed Ex.D-1 was unregistered, and consequently, a month to month tenancy which was determinable by a 15 days notice by either party and therefore, did not expire by efflux of time on 31.03.2020 but was surrendered suo moto by defendant on 31.08.2020. It is not the case of the plaintiffs that the Lease was terminated by the plaintiffs. Since, it is the admitted case of the parties that it was only vide letter dated 10.06.2020 Ex.P-5 that the defendant expressed its intention to vacate Digitally signed by HEMANI MALHOTRA HEMANI Date: MALHOTRA 2025.08.20 16:56:35 +0530 CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 24 / 25 the suit property and prior to 10.06.2020 or 31.08.2020, no notice to terminate the tenancy was issued by the plaintiffs, the defendant was therefore not an unauthorised occupant/tenant at sufferance from 01.04.2020 but was in legal occupation of the suit property, until 31.08.2020. Accordingly, it is held that plaintiffs are not entitled to any occupation charges of the suit property w.e.f. 01.04.2020. Issue no.1 is decided against the plaintiffs and in favour of the defendant.
44. Since the finding on issue no.1 is in negative, no discussion is required on determination of issue nos.2, 3 and 5.
45. Suit of the plaintiffs is accordingly dismissed.
No order as to cost.
File be consigned to Record Room.
Digitally signed by HEMANI MALHOTRA HEMANI Date: MALHOTRA 2025.08.20 16:56:43 +0530 Pronounced in the open Court (HEMANI MALHOTRA) on this 20th AUGUST, 2025 District Judge (Commercial-03) Patiala House Court : New Delhi CS(COMM) : 788/2022 Bharat Agarwal & Ors. vs. NMDC Ltd. Page No. 25 / 25