Delhi District Court
M/S Shakun & Co vs Ashok Duggal on 7 April, 2017
IN THE COURT OF MS. SAVITA RAO
ADJ (WEST)01, TIS HAZARI COURTS, DELHI
RCA No. 60761/16
Suit No. : 508/12/01
IN THE MATTER OF :
1. M/s Shakun & Co.
(Service Pvt. Ltd.)
112113, Gagan Deep Building
12, Rajendra Plae, New Delhi - 110008
2. Pradeep Mehra, Director
M/s Shakun & Co.
(Service Pvt. Ltd.)
29A, DDA MIG Flats
Rajouri Garden, New Delhi
........Appellants
Versus
Ashok Duggal
S/o Sh. R.N. Duggal
R/o B742, Anshal Designer Villa
Sushant LokI, Gurgaon
.......Defendant
Date of Institution : 27.11.2013
Date of Arguments : 30.03.2017.
Date of Judgment delivered on : 07.04.2017
Judgment
1. This is an appeal filed by appellants aggrieved by the judgment and
RCA No. 60761/16 Page No. 1/11
decree dated 10.10.2013 passed by Ld. Trial court whereby the suit filed by
plaintiff/respondent for recovery of rent and damages was decreed against
the appellants/defendants.
2. The plaintiff/respondent herein had filed suit claiming himself as owner/landlord with regard to 50% share of property bearing no. 610, 6 th floor, Gagan Deep Building, Rajendra Place, New Delhi, with joint ownership of rest 50% with appellant no.2/defendant no.2. Plaintiff and defendant no.2 are related to each other and were the directors of defendant no.1 company. The subject premises was let out to defendant no.1 in the year 1985 and rent was being paid in equal shares to plaintiff and defendant no.2 by defendant no.1.
3. Plaintiff terminated the tenancy of defendant no.1 vide legal notice dated 26.5.2000 and called upon to vacate and hand over the possession to the plaintiff on or before 30.6.2000. For the failure of defendant no.1 to vacate the subject premises, plaintiff claimed the status of defendant no.1 as unauthorized occupant and claimed damages after the termination of tenancy till the date of handing over of the possession to him.
4. On behalf of defendants, it was submitted that the rent was being paid equally to the plaintiff and defendant no.2 in their respective accounts maintained by defendant no.1 company but due to misconduct of plaintiff as Director of defendant no.1 company and because of his illegal and unauthorized possession of some articles owned by defendant no.1 company, the defendants stopped making payment to the plaintiff of his share of the lease rental for the subject premises and plaintiff was also removed from the Directorship of the defendant no.1 company.
RCA No. 60761/16 Page No. 2/115. It was further submitted that defendant no.1 company vacated the subject premises on 30.6.2004 during the pendency of the proceedings. Vide notice dated 12.6.2004, plaintiff was informed regarding the intention of defendants to vacate the premises on 30.6.2004 with request to plaintiff to take over the physical possession of the subject premises . However, the plaintiff failed to appear on 30.6.2004 for taking the possession of subject premises and accordingly defendant no.1 company handed over the possession of subject premises to the coowner and landlord i.e. defendant no.2.
6. Counter claim was also filed on behalf of defendants which was dismissed for want of taking the steps on behalf of defendants. The issues were initially framed regarding the entitlement of plaintiff for recovery of arrears of rent and damages but later on pursuant to the claim of the defendant no.1 having vacated the said premises on 30.6.2004, the issues were reframed as follows: (1) Whether the defendant has vacated the suit premises as alleged by the defendant on 30.6.2004 and handed over the possession to plaintiff? OPD (2) Whether the plaintiff is entitled to recover the arrears of rent/damages in light of issue no. 1 ? OPP (3) Whether the plaintiff is entitled to the arrears of rent of Rs. 98,700/ alongwith interest with respect to the suit property for the period 1.4.1999 to 3.12.2000 from the defendant? If so, then at what rate? OPP (4) Whether the plaintiff is entitled to damages for use and occupation of the suit property w.e.f. 1.7.2000 from the defendant? OPP RCA No. 60761/16 Page No. 3/11 (5) Whether the present suit is not maintainable in view of the preliminary objections taken in the written statement?
(6) Relief.
7. After the conclusion of trial, Ld. Trial court decreed the suit filed by plaintiff, which judgment is under challenge before this court. .
8. The admitted facts on record are pertaining to the joint ownership of subject premises with plaintiff and defendant no.2 which was let out to defendant no.1 company in the year 1985. The rent was being paid to plaintiff and defendant no.2 by defendant no.1 company in equal shares. There was no written lease agreement and the tenancy was on month to month basis. Plaintiff claimed to have terminated the tenancy of defendant no.1 company vide notice dated 26.5.2000 but the subject premises was not vacated by defendant no.1 company.
9. Defendant no.1 company subsequently claimed to have vacated the subject property on 30.6.2004 after issuance of notice dated 12.6.2004 upon the plaintiff. For the failure of plaintiff to come forward to accept the possession of subject premises, as per the case of defendant, the possession was handed over to defendant no.2 being the coowner/landlord of the subject premises. As submitted by counsel for defendants/appellants, the premises had been vacated on 30.6.2004 and the entire payment of rent had also been paid. Thereafter nothing remained to be paid in the matter.
10. Based upon the said plea of handing over of the possession, which was disputed by plaintiff, Ld. Trial court framed the additional issue i.e. "
whether the defendant had vacated the subject premises as alleged by defendants on 30.6.2004 and handed over the possession to the plaintiff RCA No. 60761/16 Page No. 4/11 (OPD)".
11. It was submitted by Ld. Counsel for defendants/appellants that the findings of Ld. Trial court which are manifestly illegal and unsustainable cannot be justified merely on the basis of frame and tenor of the said issue since it is settled proposition in law that a company has distinct legal entity of its own, holding its assets separately from its members and is distinct from its Directors. For the abovesaid reliance was placed upon following authorities: (1) P.C. Agarwala Vs. Payment of Wages Inspector , M.P. (2005) 8SCC 104 (2) Electronics Corpn. Of India Ltd. Vs. Secy. Revenue Deptt. Govt. of A.P. (1999) 4 SCC 458.
(3) Heavy Engg. Mazdoor Union Vs. State of Bihar (1969) 1 SCC 765 (4) Tata Engineering and Locomotive Co. Ltd. Vs. State of Bihar, AIR 1965 SC 40 (5) Bacha F. Guzdar Vs. CIT (1955) 1 SCR 876 (6) Mukesh Hans Vs. Uma Bhasin, 2010 SCC Online Del 2776 (7) V.K. Uppal Vs. M/s Akshay International Pvt. Ltd. 2010 SCC Online Del 538.
(8) Sangeeta Jewels Vs. Ajay Kumar Jain 2008 SCC Online Del 181 (9) Steel Authority of India Vs. Century Tubes 2005 SCC Online Del 164.
(10) Rama Association (P) Ltd. Vs. Delhi Development Authority RCA No. 60761/16 Page No. 5/11 1991 SCC Online Del 467
12. Ld. counsel for appellants also submitted that the law provides piercing of the corporate veil to treat the company and its members as one only in exceptional circumstances of fraud or impropriety, for which reliance was placed upon following authorities.:
(1) State of Rajasthan Vs. Gotan Lime Stone Khanji Udyog (P)Ltd.(2016)4SCC469 (2) Balwant Rai Saluja Vs. Air India Ltd. (2014) 9 SCC 407 (3) S.P. Gupta Vs. Packwell Manufacturers (Delhi) Pvt. Ltd. (2015) 189 Compcas 586
13. It was further submitted that the tenor or frame of any issue cannot legalize what is illegal. It cannot create a right which does not exist or an obligation that the law does not provide. In other words, if in law possession of one coowner is possession of all, the said issue could not have changed that legal position. Similarly if a tenant has handed over the possession to one coowner , it ipso facto means in law that the possession is handed over to all coowners. As further submitted, the possession having been handed over to one coowner by defendant no.1, therefore it cannot be held to have been obligated to hand over the possession to the plaintiff.
14. As borne out from the record, the additional issue was framed after the plea of defendants regarding handing over of the possession, onus of which was upon the defendants. Appellants moved an application u/s 151 CPC seeking to amend the said issue with substitution of the words "and handed over the possession to one of the landlords" in place of "handed over the possession to the plaintiff". The said application of appellants was RCA No. 60761/16 Page No. 6/11 dismissed vide order dated 14.7.2010. The said dismissal order passed by ld. Trial court was never challenged by defendants, therefore attained finality. Meaning thereby that the defendant no.1 was to discharge the onus regarding handing over of the possession of the subject premises to the plaintiff.
15. Besides that, even if the contention of Ld. Counsel for defendants is considered regarding handing over of possession to one coowner, whether it should be treated as handing over of possession to all the coowners is to be considered in the peculiar facts and circumstances of the present case. Plaintiff and defendant no.2 both were the directors of defendant no.1 company when the subject premises was leased out to defendant no.1. Subsequently differences arose and in terms of own plea of the defendants, plaintiff was removed from the directorship of defendant no.1 company.
16. There was series of litigation between the parties. Plaintiff had terminated the tenancy of defendant no.1 company with regard to subject premises and called upon it to hand over the possession of subject premises. The possession of subject premises was not handed over after the issuance of said notice. Rather the rental share of the plaintiff was also stopped being paid on the ground of misconduct of plaintiff as Director of defendant no.1 and for the alleged unauthorized occupation of some articles owned by defendant no.1.
17. Apparently the relationship between the plaintiff and defendant no.2 were not cordial and rather can be termed as hostile to each other. Defendant no.2 continued to be Director of Defendant no.1 company and rather deposed as DW1 while representing defendant no.1 company, as well RCA No. 60761/16 Page No. 7/11 as himself. A company as per the settled proposition of law is definitely a separate legal entity but is run and is exercised control by the human mind. The piercing of veil is permissible to remedy a wrong done by a person controlling the company which shall depend upon the peculiar facts and circumstances of each case.
18. In the instant matter, the notice dated 12.4.2004 was allegedly issued upon the plaintiff. For the failure of plaintiff to come forward to accept the vacant possession of subject premises, same was handed over to defendant no.2 being the coowner and colandlord of the property in question. The abovesaid itself makes it obvious that defendants were aware of the necessity of issuance of notice upon the plaintiff and calling upon him to come forward to accept the possession of subject premises considering the acrimonious relations between the parties. However, it is to be seen whether any serious and genuine effort was made by the defendants to ensure the service of alleged notice upon the plaintiff. Notice dated 12.4.2004 was sent through UPC with no justification for not sending the same by registered post at least, proof of which could be retained by them.
19. As was observed by Hon'ble Supreme Court in State of Maharashtra Vs. Rashid B. Mulani (2006) 1 SCC 407 that " A certificate of posting obtained by a sender is not comparable to a receipt for sending a communication by a registered post. When a letter is sent by registered post, a receipt with serial number is issued and a record is maintained by the post office. But when a mere certificate of posting is sought, no record is maintained by the post office either about the receipt of the letter or the certificate issued. In the absence of such a record, a certificate of posting is RCA No. 60761/16 Page No. 8/11 of very little assistance, where the dispatch of such communication is disputed or denied ".
20. Plaintiff per contra has disputed the receipt of any such legal notice, therefore, there was no occasion for him to make himself available to accept the vacant possession of subject premises.
21. DW1 admitted in his deposition that the tenanted premises was lying locked and the keys of the locks put on the tenanted premises were in his custody. It was submitted by Ld. Counsel for appellants that in absence of any written agreement, it was not mandatory on the part of tenant to hand over the possession by way of delivery of lock and keys to the landlord; vacation and consequent handing over of possession of tenanted premises can be deemed by effecting the notice of vacation thereof on the part of tenant.
22. As already noted, the service of alleged notice upon the plaintiff itself has not been proved on record, whereas contrary to the plea taken, defendant no.1 preferred to hand over the very lock and keys of the subject premises to defendant no.2 to assert that the possession of subject premises was handed over to defendant no.2. Even during the pendency of the proceedings, despite the specific plea of PW1 that he was still ready to take the possession of the subject premises and despite the framing of issue in this respect, no efforts were made on behalf of defendants to hand over the possession of subject premises to the plaintiff when admittedly th e RCA No. 60761/16 Page No. 9/11 possession was never handed over to plaintiff.
23. It was contended by ld. Counsel for appellants that Ld. Trial court erred in holding that since the defendant no.2 is also Director of defendant no.1 company and he received the locks and keys from defendant no.1 company as owner, therefore handing over of possession of the subject premises cannot be said to have been effected by defendant no.1 company as tenant. It was submitted that had the Director of the company being not coowner and had been handed over the locks and keys of the tenanted premises, in that situation, it could not have been held that possession of tenanted premises had not been vacated. With mere coincidence in the instant matter that defendant no.2 is both director and coowner of the suit property at the same time cannot be misinterpreted to disallow the plea of defendants regarding the handing over of possession.
24. DW1 deposed as representative of defendant no.1 and stated that he had offered to hand over the possession of tenanted premises to the plaintiff by way of letter. Surprisingly, for the alleged failure of plaintiff to come forward to receive the possession, DW1 handed over the keys of subject premises to himself against the receipt of possession as coowner of subject premises instead of ensuring the handing over of possession to the plaintiff. Here, director of the company handed over the possession of subject premises on behalf of the company to himself in the capacity of coowner of suit property when admittedly the relationship between the alleged co owners /joint owners were not good and the other coowner had already called upon defendant no.1 company to hand over the possession of suit premises to him.
RCA No. 60761/16 Page No. 10/1125. In the facts and circumstances of the case, rather it remains the oral assertion on behalf of defendants regarding even the handing over of possession by defendant no.1 company to defendant no.2 being coowner as there is no basis to differentiate whether defendant no.2 was continuing holding the keys of the subject premises as co owner or as director of the defendant company. Even if the said oral assertion is taken as gospel truth, considering the background regarding the uncordial terms between the parties, the possession of one coowner of the suit property who happens to be the Director of the tenant company cannot be said to be possession on behalf of all the co owners of the subject premises as has been rightly held by Ld. Trial court..Consequently the plaintiff having not been handed over the possession of subject premises is also entitled for damages for unauthorized user and occupation of tenanted premises by defendant no.1 company.
26. Having discussed as above, finding no substance and merits in the appeal, same is dismissed with no order as to cost. Decree sheet be prepared accordingly. TCR alongwith copy of this order be sent back to the trial court. Appeal file be consigned to record room.
(SAVITA RAO) Addl. District Judge,West01, Tis Hazari Courts, Delhi Announced In the open Court on 07.04.2017 RCA No. 60761/16 Page No. 11/11